Welcome to the RLJ Lodging Trust fourth 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 Finance and Treasurer. Please go ahead. Thank you, Operator. Good morning and welcome to RLJ Lodging Trust 2023 fourth quarter and full year 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-K 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 reconciliations to GAAP located in our press release. Finally, please refer to the schedule of supplemental information which was posted to our website last night, which includes the former operating results for our current hotel portfolio for 2023. I will now turn the call over to Leslie. Thanks, Nikhil. Good morning, everyone, and thank you for joining us. We are very pleased with our fourth quarter results, which outperformed the industry for the fourth consecutive quarter, demonstrating our strong growth profile and underscoring our ability to capture emerging demand trends. Our results this quarter exceeded our expectations and capped off a very successful year for RLJ, where we achieved top quartile RevPAR growth of 9% driven by our urban portfolio and strong performance from our conversions. We exceeded our initial projections for our 2022 conversions, revenue enhancement, and margin expansion initiatives. We made significant progress on our second wave of conversions in Nashville, Houston, and New Orleans. We announced two more conversions, which included our two Pittsburgh assets. We further strengthened our balance sheet while returning capital to our shareholders, and we recently acquired the fee simple interest in our Boston Wyndham asset, pulling forward another growth opportunity. Our strong execution and results this year validate our thoughtful efforts to curate a high-quality portfolio with multiple channels of growth, which is giving us the ability to outperform on a relative basis this year and beyond. Now, relative to our operating performance for the quarter, our RevPAR grew by 5.2% over the prior year, outperforming the industry by 4 times and our competitive set by 290 basis points. Our year-over-year RevPAR growth accelerated from the third quarter by 180 basis points, benefiting from a balance between occupancy and ADR, demonstrating additional run room in demand and continued pricing power across our portfolio. We are pleased to see this positive momentum carry into January, which achieved close to 6% RevPAR growth. Our urban markets were the underlying driver of our RevPAR growth. These markets continue to benefit from robust group demand, the ongoing improvement in business travel, and emerging international inbound demand. Additionally, urban leisure remained healthy as large-scale events related to concerts and sports, as well as other leisure activity, drove strong weekend demand. These trends were broad-based with a number of our urban markets, such as Boston, Pittsburgh, Southern California, South Florida, and Denver, achieving double-digit RevPAR growth. The fourth quarter also saw exceptional growth at our three conversions in Charleston, Mandalay Beach, and Santa Monica. In terms of segmentation, the positive momentum in business travel led our BT revenues to increase to 79% of 2019 levels, a new high watermark, and a 400 basis point improvement from the third quarter. Our growth in BT revenues was balanced between 7% growth in room nights and 6% growth in ADR, contributing to our weekday revenues achieving 94% of 2019 levels, which was a 100 basis point sequential improvement from the third quarter. In addition to strong demand from SMEs, we are also seeing continued improvement in production from traditional BT sources such as finance, technology, pharma, and aerospace. Relative to group, demand remains healthy. In addition to strong attendance at citywide, the growth in small, self-contained group is driving the improvement in this segment, all of which led our fourth quarter group revenues to increase by mid-single digits over the prior year. We expect small group demand to remain strong, and our hotels are in the sweet spot to cater to this growing segment, given the attractiveness of our meeting space configuration to this segment. Finally, we were encouraged to see healthy leisure trends persist throughout the quarter, especially around holidays, benefiting our resorts, which achieved 6.6% RevPAR growth. With many people settling into a hybrid schedule, weekend demand continued to be strong across our portfolio, especially for urban weekends, which outperformed our portfolio. The strength across all segments of demand during the fourth quarter, combined with strong growth of 8.1% in our non-room revenues, led our total revenues to increase by 5.7%. This strong growth translated into positive year-over-year EBITDA growth of 2.3%, which speaks to our lean operating model. Turning to capital allocation, our initial conversions are yielding strong results that are pacing ahead of our expectations. We were pleased to provide updated projections outlining the incremental upside and to showcase the high-quality renovations at the Pier side in Santa Monica and Zachari Dunes on Mandalay Beach to many of you recently. The strong results from these assets bolstered our confidence in the next wave of our conversions. During the year, we initiated the physical conversions in New Orleans and Houston, which will position them for a strong ramp, and we are on track to begin Nashville's renovation later this year. We make great strides towards continuing to unlock incremental embedded growth by announcing that the Renaissance Pittsburgh Hotel will join Marriott's Autograph Collection and that the Wyndham Pittsburgh University Center will be converted to a Courtyard by Marriott. Additionally, we executed the optionality that our strong balance sheet provides by returning capital to our shareholders through opportunistically repurchasing $77 million of shares at an attractive price while doubling our dividend during the year. The execution of these initiatives has been made possible by the strength of our balance sheet, which also gives us the capacity for external growth. More recently, we acquired the fee simple interest in the 304-room Boston Wyndham Beacon Hill from the ground lessor. We took advantage of our unique position to secure full ownership in order to unlock another compelling conversion opportunity. We acquired this irreplaceable real estate for $125 million, representing $411,000 per key, a meaningful discount to recent hotel trades in Boston. The hotel benefits from an A-plus location in Boston's Beacon Hill neighborhood, surrounded by Mass General, which is currently undergoing a $1.8 billion expansion. The acquisition will allow us to move forward with executing the same conversion playbook that has been successful for RLJ. This asset is highly attractive to numerous brands, given the demand dynamics of the market. Our deep institutional knowledge of the overall market, the hotel's bull's-eye location within the submarket, and the quality of the asset gives us confidence that upon conversion, there is 40%+ upside to the hotel's current EBITDA. We look forward to providing additional details around the conversion of the hotel after we finalize the negotiations with the brand. Overall, we are encouraged by the pipeline of off-market external growth opportunities that we are seeing. The current backdrop of constrained lending provides a significant advantage to all cash buyers like RLJ. That said, we will continue to maintain our discipline as we have demonstrated. As we look ahead to 2024, while economic uncertainty persists, we remain optimistic that industry fundamentals will achieve positive growth this year, especially against the backdrop of minimal new supply. We believe that urban markets will continue outperforming the industry as urban is poised to disproportionately benefit from the strong group trends, the recovery in business transient demand, and improving inbound international travel. We also expect more pronounced divergence in individual market performance to emerge, given citywide calendars, the location of large leisure-oriented events, and inbound international travel. Given our footprint, which should benefit from these trends, we are positioned to outperform this year. There are several key markets which we expect to be strong this year. Boston should outperform due to a strong citywide calendar, robust business travel from Boston-based industries such as biotech and higher education, and Boston's attractive positioning to inbound international travelers. Southern California should outperform as a result of a strong San Diego citywide calendar, improving business transient from aerospace and a post-Writers' Strike backlog of demand from Hollywood-related industries, and increased inbound international visitation, especially from Asia. New York is expected to benefit from improving travel related to the financial sector, continued strong leisure, and increasing inbound international demand during a period of favorable demand-supply dynamics. While we remain sober to Northern California's slow recovery and fewer citywides this year, there are some encouraging green shoots in the market, such as improving perception of San Francisco safety, increasing return to office mandates by tech companies and investors, as well as venture capitalists returning to San Francisco due to the concentration of tech talent and AI startups. Additionally, we expect that group will continue to benefit from robust self-contained and small group bookings, as well as strong citywide calendars in many major U.S. markets, supported by our group booking pace being 12% ahead of 2023. Overall leisure travel should remain healthy, led by the strength in urban leisure, which should continue to benefit from hybrid work flexibility and large-scale events, including sports, concerts, and other activities. Longer term, we are optimistic about the positive trajectory of lodging fundamentals. Our confidence continues to be supported by the ongoing shift of consumer preferences towards experiences, the improvement in business demand, the continuing recovery in inbound international travel, and the growth of citywide events and attendance. All of these positive trends will disproportionately benefit urban markets, especially against the backdrop of an elongated period of limited new supply, allowing these markets to outpace the overall industry growth for several years. As this new normal takes hold, our portfolio is well positioned to capture growth in all segments of demand. Over the last several years, we have intentionally repositioned our portfolio into prime locations that benefit from seven-day-a-week demand within urban markets, allowing us to benefit from these emerging trends, in addition to growth from our acquisitions and conversions. We believe that all of these tailwinds should allow us to continue to exceed the industry. Our growth profile will be bolstered by our high-quality portfolio, which is built to capture the growing live, work, play trends in urban markets, the continuing and future upside from our announced conversions, the embedded incremental growth from executing on our future pipeline of conversions and ROI opportunities, the tailwinds from our recent renovations in South Florida and Southern California, the significant free cash flow generated by our portfolio to self-fund growth, and the continued optionality created by our strong balance sheet, which should allow us to deliver attractive shareholder returns long term. Overall, I could not be more proud of the efforts of our entire team, including our operators, whose many contributions have positioned us to drive significant shareholder value over the next several years. I will now turn the call over to Sean. Sean. Thanks, Leslie. To start, our comparable numbers include our 96 hotels owned throughout the fourth 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 fourth-quarter operating results, which once again demonstrated the runway for growth embedded in our urban-centric portfolio. Our fourth-quarter RevPAR growth of 5.2% was driven by a 1.5% increase in ADR and a 3.6% increase in occupancy. Fourth-quarter occupancy was 69.3%, which was 92% of 2019 levels. Average daily rate was $193, achieving 107% of 2019, and RevPAR was $134, which achieved 99% of 2019, the highest level since the start of the pandemic. In particular, our urban markets outperformed, with RevPAR exceeding 2019 levels at 101%, including ADR at 111% of 2019. RevPAR in most of our urban markets exceeded 2022, including Boston at 121%, Los Angeles at 118%, Pittsburgh at 119%, San Francisco at 113%, Denver at 110%, New York at 104%, and Washington, D.C. at 105%. Monthly RevPAR growth throughout the fourth quarter exceeded 2022 for each month. RevPAR growth was 6.4% in October, 5.6% in November, and 3% in December, and achieved 101%, 96%, and 99% of 2019 levels during October, November, and December, respectively. Similar to RevPAR, our monthly total revenue growth above 2022 benefited from continued out-of-room spend and was 7.6% in October, 5.3% in November, and 3.7% in December, and achieved 102%, 96%, and 100% of 2019 levels during October, November, and December, respectively. We are encouraged by the start of the year, where we saw positive momentum in January, which is always a seasonally slower month, with RevPAR growth of 5.8% above January 2023. January RevPAR was driven by occupancy of 62% and ADR of approximately $191, representing 104% and 102% of January 2023. Turning to the current operating cost environment, recent inflationary pressures continued to normalize during the fourth quarter. On a per-occupied room basis, total hotel operating cost growth was limited to 3.4%, which is 260 basis points lower than the third quarter. Underscoring the benefits of our portfolio construct and our initiatives to redefine our operating cost model, total fourth-quarter hotel operating costs were only 4.3% above 2019 levels, meaningfully below the aggregate core CPI growth rate since 2019. Drilling down further into hotel operating expenses, fixed costs such as insurance and property taxes were the most significant driver of the year-over-year increases in hotel operating expenses, increasing 16% during the fourth quarter. The increases in fixed costs are impacting most industries and are not specific to the lodging industry. We are encouraged by the trends on the more controllable variable hotel operating costs, which grew 6.6% above 2022, or only 2.8% on a per-occupied room basis. Finally, fourth-quarter wages and benefits, our most significant operating cost at approximately 40% of total costs, remain generally in line with 2019 levels at 104%. There are many factors that influence these positive results, with the most significant contributors being the successful restructuring of many of our third-party operating agreements and our lean operating model with 18% fewer FTEs than 2019. Our portfolio remains well positioned to maintain fewer FTEs, given our lean operating model, smaller footprints, limited F&B operations, and longer lengths of stay. Our fourth-quarter operating trends led our portfolio to achieve hotel EBITDA of $89.6 million and hotel EBITDA margins of 28.1%. We were pleased with our operating margin performance, which was only 93 basis points lower than the comparable quarter of 2022, despite continued cost pressures. Turning to the bottom line, our fourth-quarter adjusted EBITDA was $79.2 million, and adjusted FFO per diluted share was $0.34, which came in towards the high end of our guidance. During 2023, we were very active in managing our balance sheet to create additional flexibility and further lower our cost of capital, which included extending $425 million of mortgage debt, recasting our $600 million corporate revolver, and entering into a $225 million term loan. The execution of these transactions is a testament to our strong lender relationships and favorable credit profile. We also took advantage of interest rate volatility to proactively manage our interest rate risk by entering into $525 million of new interest rate swaps during the year. Turning to 2024, we will extend our $181 million of mortgage loans and are in the process of refinancing our $200 million secured loan, which is on track to wrap up during the second quarter. Today, our balance sheet is well positioned with an undrawn corporate revolver. Our current weighted average maturity is approximately 2.9 years. 81 of our 96 hotels are unencumbered by debt. Our weighted average interest rate is an attractive 4.12%, and 89% of debt is either fixed or hedged. As it relates to our liquidity, we ended the quarter with approximately $517 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 fourth quarter, we were active under our $250 million share repurchase program and repurchased approximately 930,000 shares for $9.9 million at an average price of $10.69 per share. In total, during 2023, we repurchased approximately 7.6 million shares for $77.2 million at an average price of $10.20 per share. Additionally, we ended the year with a quarterly common dividend of $0.10 per share, which is 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 full-year 2024 guidance that anticipates a continuation of the current operating and macroeconomic environment. For the full year 2024, we expect comparable RevPAR growth between 2.5%-5.5%, comparable hotel EBITDA between $395 million-$425 million, corporate adjusted EBITDA between $360 million-$390 million, and adjusted FFO per diluted share between $1.55-$1.75. Our outlook assumes no additional acquisitions after the Wyndham Boston and no dispositions, refinancings, or share repurchases. We estimate 2024 RLJ capital expenditures will be in the range of $100 million-$120 million, and net interest expense will be in the range of $91 million-$93 million. Our net interest expense will be above 2023 due to the impact of expiring swaps that had lower interest rates. With respect to the cadence for the year, we expect 2024 to follow similar quarterly seasonal patterns as 2023, other than the first quarter, which will be impacted by the timing of Easter and difficult comps to the significant growth rates during the first quarter of 2023. Finally, please refer to the supplemental information, which includes comparable 2023, 2022, and 2019 quarterly and annual operating results for our 96 hotel portfolio. Thank you, and this concludes our prepared remarks. We will 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 star on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions. Thank you. Our first question comes from a line of Anthony Powell with Barclays. Please proceed with your question. Hi, good morning. Just a few questions on the Wyndham Beacon Hill deal. Could you maybe talk about multiple or cap rate or any way you can quantify, I guess, the valuation of the transaction? Hey, Anthony. Thanks for the question and good morning. Let me frame the transaction and I'll answer your question. I think that through our leasehold, we had the right to the cash flows for the next 4.5 years. This transaction gave us the ability to buy the asset fee simple and have the rights to the cash flows forever. We took advantage of our unique position as leaseholder to have a competitive advantage. We used that competitive advantage and the current backdrop to give us the ability to buy the asset at a very attractive level. Most recent transaction that happened at the Whitney was only 4 blocks away from our asset. It traded for $875,000 a key. We believe the value that we bought this at is at a significant discount to what we would have had to pay at the end of our lease. I mean, keep in mind that this is bullseye real estate. It's got significant FAR. It's scarcity of land value in Boston, and we would have had no leverage. And we would have been competing against not only hoteliers, but we would also have been competing against alternative use and then clearly Mass General, who has billions of dollars to deploy towards strategic acquisitions. And so we believe that getting access to the upside of this asset earlier, getting a discount to what we would have had to compete for at the end of our lease, more than offsets any remaining cash flow that we would have had in our lease term. And it allows us to unlock another compelling value creation opportunity, which we believe has 40%+ upside to the current EBITDA. From our perspective, we underwrote this to stabilize at an 8x-8.5x multiple on a purchase price. If you add in the CapEx based on the brands that we're looking at, it's another 2x-2.5x. Okay. So 9-9.5, I guess, stabilized after CapEx. Is that the way to think about it? Yeah, roughly. Okay. All right. This may be one more in terms of leisure trends. When you combine your weekend leisure plus your resort demand, it seems like you guys are doing pretty well in leisure generally. So maybe talk about how leisure as a whole is looking through this year, how did it trend to the back half of last year, and do you see that stabilization and improvement happening in that part of the business? Yeah. I mean, our general perspective is that leisure remains healthy. Our total revenues were up 4.3% year-over-year in the fourth quarter, and that was room-night driven. If we look at just our weekends, our weekends were up 4.4% year-over-year, and that was driven by two-thirds demand as well. Urban weekends continued to be strong. We're about 114% of 2019 levels on urban weekends, and that's 200 basis points ahead of where our overall portfolio is at. As you mentioned, our results were strong in the fourth quarter, up 6.6%, and it's benefiting, obviously, from our conversions. But we saw strength in South Florida, which was up 10% in the fourth quarter. Southern California was up. And also, we're clearly benefiting from the continued flexibility that the work-life environment provides us. I would also say that as we look forward into the year, we expect leisure to remain strong and to be balanced between rate and OC, and urban leisure is going to drive that for us. Okay. Thank you. Our next question comes from a line of Gregory Miller with Truist. Please proceed with your question. Thanks. Good morning, everybody. I'd like to start off with the Marriott in Louisville. Could you share your thoughts about that property, the expectations for you all for 2024 on that property, maybe about group pace or overall growth expectations relative to the full portfolio guidance? Thanks. Yeah. Good morning, Greg. What I would say is Marriott Louisville not only is coming off of a good year this year because in 2023, it had about a 22% RevPAR growth. The great thing about that RevPAR growth, almost all of it came in ADR compared to 2019. When we look into 2024, we're also very encouraged. Your question about group pace, we're at 107%. As you know, our location is connected to the convention center, so we're in position A. A couple of things that I would also add, this year, we got a couple of special events. It's the 150th year of Kentucky Derby will be celebrated. One of the four major golf tournaments, the PGA tournament, will be in Valhalla this year, so we get some benefits from that. Lastly, as Leslie mentioned, urban leisure, the Bourbon Trail is just another type of example of enjoying the venues that are driving that type of demand in an urban environment like that. I would just sort of add, just in general, that our portfolio diversification is going to be really strong this year. We mentioned in our prepared remarks that Boston, New York, and Southern California are going to be strong, but we also see strength in Atlanta, Louisville, in terms of what Tom talked about, Denver, Pittsburgh, and Orlando as well. Diversification is obviously benefiting our portfolio. All right. Thanks. And then for the follow-up question, I'd like to ask about the transactions environment today and your current expectations for upscale, chain-scale transactions this year. Perhaps coming out of the ALIS Conference, do you anticipate that there's going to be a pickup in activity in the back half of this year, or at this stage, do you think some of the hype is likely to be unrealized? No. Look, I think as we sit here today, transaction volume continues to be constrained, but we do have an expectation, like the broader market, that transactions will improve, the volume will improve in the back half of the year given the expectations around interest rates coming down. And that optimism has sort of fleshed itself out through increased conversations in general, more previews of assets at ALIS, which you just mentioned, BOVs are being done. And I think, in general, because the concept of a recession is generally off the table, sellers have been able to and people have been able to sort of underwrite a little bit more clarity. And so as a result, while the bid-ask hasn't closed, it's gotten a little bit closer, and that makes things more actionable. We also think that creates a very attractive environment for all cash buyers, at least for the next couple of quarters until interest rates come down. The longer it takes for interest rates to come down, that window for all cash buyers is elongated from that perspective. What we're seeing from our perspective is that our team is actively underwriting. Our pipeline is largely focused on unique situations that benefit all cash buyers. It could be related to the fact that a seller has a maturity. It could be related to fatigue by an equity partner or incremental capital that needs to be put in that the buyer doesn't want to put in. And so we see things that are materializing today as a result of the current backdrop. All right. Thanks. I appreciate it, Leslie. Our next question comes from a line of Michael Bellisario with Baird. Please proceed with your question. Thanks. Good morning, everyone. First question on guidance, maybe big picture, how are you thinking about the split between rate and occupancy growth in 2024? And then if my math is correct, it looks like expenses are maybe up 5.5% at the midpoint. Maybe help us understand what the building blocks are to get to that 5.5 number. Thanks. Yeah. Mike, our perspective is that our growth is going to be split two-thirds demand and one-third rate. And if you sort of think about how our portfolio is indexed, we're indexed to urban, urban's indexed to BT, and BT is still, our BT revenues were only at 73% of 2019 levels. And so there's room for growth both from a demand and occupancy perspective, and so that's how we've sort of thought about it. Yeah. And Mike, on the operating expenses, you're correct that the midpoint of guidance assumes sort of mid-5% increases year-over-year. The cadence of that or the split of that, rather, is we expect the pressures around fixed costs to continue throughout 2024, and so that's really primarily driven by insurance and property taxes. And so we would expect those fixed costs to be up in the low double digits again next year on the operating costs. I think on the variable costs, we'd expect them to be roughly 100 basis points lower growth rate than the overall operating costs driven by on a per occupied room basis. We expect our costs to only be up about 2% year-over-year. And so we think, net-net, the operating cost environment, it improved throughout 2023, and we expect that improvement to continue into 2024 as the inflationary pressures are in a rearview mirror. Thanks. That's helpful. And then just one follow-up. On Boston, could you provide what the hotel-level EBITDA was in 2023 and how much was the ground rent expense, i.e., what's going away in 2024? And then any initial thoughts on San Diego given that that lease expires in 2029? Thanks. I'll start with some of the stats and then pass it over to Leslie to talk about San Diego. The hotel did roughly $10.5 million of EBITDA in 2023, and the ground lease expense of 2023 was roughly $750,000. And then, Mike, as it relates to San Diego, we're in active negotiations with the Port of San Diego to extend the lease. We feel very good about where we are in our discussions. And we are a tenant that's in good standing, and so we see a path forward in terms of extending the lease. Helpful. Thank you. Our next question comes from a line of Dori Kesten with Wells Fargo. Please proceed with your question. Thanks. Good morning. As you think through the phasing of your conversions, renovations over the next few years, should we assume that the upside of completed work fully offsets, I guess, ongoing renovation headwinds, or are there certain projects that stick out as being particularly disruptive? Yeah, Dori. So from a renovation displacement, because conversions are just a subset of our renovation dollars, we don't expect either a headwind or tailwind over the next several years related to renovations. And that's really a byproduct of us having an in-house design and construction team that's able to sequence the rooms out of service on the conversions and renovations to minimize the time out of service and also have a scope that gets hotels back up and running as quick as possible. And so renovation disruption for us is not going to be, as I said, either a headwind or tailwind for this year or for the next several years. From a ramp-up perspective, you're correct. What we've said is that we're going to launch a couple of conversions per year, and we're sequencing that in a way that would allow us to have outsized growth in each one of those years. Generally speaking, on our conversions, we underwrite a ramp of 2-3 years. If it's more leisure-centric, we generally believe that that ramp can be in the 2-year versus the 3-year perspective, but that's our general assumptions. And then all of that, when you put it all together, was baked into the bridges that we provided as part of our Santa Monica deck, and we provided how we expected the EBITDA for the conversions to ramp over the next 3 years. Sean, while I have you, you said that the expiration of swaps was the headwind in your 2024 FFO guide. Can you provide us with your view on your fixed versus floating exposure as we look out over the next year? Sure. So we ended the year with a little under 90% of our debt that was either fixed or hedged. Our long-term strategy is to have anywhere from 20%-30% of our debt as floating as a hedge against a downturn. If we did nothing else, we would end 2024 with a little under 30% of our debt floating. Now, we were active in 2023. You'd expect us to be active in managing it again in 2024, but we entered into $525 million of swaps in 2023 at an average rate of roughly 3.5%. And so you'd expect us to continue actively managing it, but generally speaking, that 20%-30% floating is what we target for our long term. Okay. Then just last, should we expect your dividend payout as a percentage of FFO per share to look more like 2019 by 2025? I'm just trying to get a sense of where your NOLs are and how you might use those over the medium term. Yeah. So we have several years of NOLs remaining, and so really, our dividend policy is going to be based on what we think an appropriate payout ratio is. I think the way we're thinking about the payout ratio, sort of I'll call it normalized in this environment, is going to be less than it was in 2019 for all lodging REITs. And so our payout ratio today as FFO is in the mid-30s. We think our current payout ratio has room for increases over both this year and over the next couple of years. We think a normalized payout ratio is somewhere in the 60%-65% of FFO at sort of the peak of this cycle. And you would expect us to be measured in how we increase that throughout the cycle. But the NOLs provide us the flexibility to do that based on what we think's appropriate for the market. Okay. Thank you. Our next question comes from a line of Tyler Batory with Oppenheimer. Please proceed with your question. Good morning. Thank you. Can you please talk through your industry RevPAR assumption that's implied in your guidance this year? Just trying to get a sense of what sort of outperformance you expect from your portfolio versus the broader lodging space. So, I mean, look, the baseline for our assumption is that our portfolio should perform in line with urban, which is projected to be 3.8. And so clearly, our midpoint of our guidance lines up with that. We expect urban to outperform the industry. If you look at fourth quarter, urban outperform the industry by 4x. If you look at the full year, urban outperform the industry by 2x. Okay. Perfect. And then market-specific, can you talk through a little bit more, get some more color on what you're seeing in San Francisco, CBD, and then also talk about Silicon Valley as well, please? Yeah. I would say that overall, keep in mind that we have a diversified footprint, and we only have a few assets in the CBD. In the fourth quarter, our CBD benefited from the citywides and offers some self-contained. Our Silicon Valley in the fourth quarter saw just weak transient, and I think that was reflected in the numbers that we put out in our supplement. As we look forward, San Francisco, we acknowledge, as we set in our prepared marks, is going to have a soft citywide, but we are seeing improvement in BT coming this year, particularly as the return to office increases and as the activity around AI continues to increase as well. But I would say that generally, Tyler, that if you look at the headline risk that San Francisco had, it's continuing to subside. The headlines recently have been very positive around the amount of leasing that's going on in the market as well as what's happening from an AI perspective. The city's done a great job from a standpoint of addressing safety. They had some successes with APEC last quarter. And so we continue to see the groundwork being laid for San Francisco to recover. Okay. How about Silicon Valley? Any commentary there? I mean, it's probably similar to what you just articulated in terms of San Francisco. Sure. I'll add a little color on that too. So in Silicon Valley, it's important that we have international deployment. When we think about what's happening and forward booking from China as well as project business that comes there, it was encouraging to see in September, October, November that we're starting to get closer to about 95% of deployment from an international standpoint. And forward booking for China, it's supposed to be three times more than it was in 2023, so that's encouraging. What I would say is we have a lot of extended stay hotels in Silicon Valley, and we have one that's under renovation. We're prepared for the summertime of 2024, and we're encouraged based on some of the back-to-office that we were talking about for tech and some of the businesses that are kind of congregating and moving towards having more demand. We saw already in Q1 a little bit more demand than we did in Q4, so that was encouraging as we come out of the gate in 2024. Okay. Great. That's all from me. Thank you for the detail. Our next question comes from a line of Chris Darling with Green Street Advisors. Please proceed with your question. Thank you. Good morning. Leslie, going back to your comments around the transaction market, how are you thinking about incremental asset sales in light of the implied EBITDA multiple at which you trade relative to private hotel pricing? So, Chris, I would say that, look, I think you should expect us to be active portfolio managers. As the industry and market dynamics unfold, we're evaluating the impact on our portfolio. As a new normal takes hold, we'll look at our views on current markets and how they evolve. We don't have to sell assets because given our balance sheet, but we can be opportunistic. And so as we think about the growth rates in certain markets and how that profile compares to our overall portfolio or the capital needs and an asset needs relative to the returns it can generate, we'll look to recycle assets along that way. But I think from our perspective, it's an asset-by-asset kind of perspective. All right. Appreciate those thoughts. And then maybe just following up on the comments you just provided around the Bay Area, if I look at the overall portfolio, I see that 2023 EBITDA margins finished about 300 basis points below comparable 2019 levels. Curious what that would look like if you excluded the Bay Area, just trying to get a sense of what the upside might be as that region continues to ramp. Yeah, Chris. So without the Bay Area, that is the primary driver of sort of where our EBITDA is relative to 2019. From a margin perspective, the lion's share of it comes from Northern California. So if you exclude Northern California from our portfolio, the margins are much closer, if not right on top of 2019. But as Leslie mentioned, our view around the green shoots in Northern California gives us some encouragement going forward. But when you look at the delta to 2019, Northern California is driving that gap. All right. That's helpful. That's all from me. Thank you. Our next question comes from a line of Austin Wurschmidt with KeyBanc. Please proceed with your question. Great. Thanks. Good morning, everybody. Just going back to the transaction theme, Leslie, I think you discussed looking for unique opportunities that benefit all cash buyers. I guess how much additional dry powder do you have before you'd need to match-fund any capital outlays with either dispositions or some other capital raise? Yeah. Like I said, I don't have a good number for you, but what I would say is that we feel good about what's in our pipeline relative to where our current balance sheet sits. Yeah. And I'll just add on, right? We're sitting at year-end with a little over $500 million of corporate cash. We used $125 million of that for Boston. And so pro forma, that's $375 million of cash. Our portfolio generates roughly 25% of our EBITDA, turns in the free cash flow on an annual basis, right? So on average, that's north of $100 million of incremental free cash flow generated by our portfolio, which obviously creates incremental capacity as well. But I think we've got I think the takeaway is that with our existing balance sheet and our free cash flow, we have the flexibility for incremental deals without having to go anywhere near the markets unless it's favorable to do so. And then of that free cash flow that you just highlighted, I guess how much of that goes towards some of the renovation spend that you're doing, and how much is sort of freed up to share buybacks, acquisitions, and other sort of capital allocation opportunities? That percentage and those numbers are after everything, including an assumption on dividends as well as CapEx. That's helpful. And then on the renovation side, I guess how soon could you commence the renovation at the Boston Wyndham? And do you have a sense today of the capital spend necessary to achieve that 40% upside to Hotel EBITDA that you highlighted? Yeah. I mean, we're still negotiating with the brands of Boston, so that number is sort of a range that we're working through. I would say in terms of timing, our objective is to have the ask completed before World Cup, which was mid-2026. Very helpful. Thank you. Our next question comes from a line of Floris van Dijkum with Compass Point. Please proceed with your question. Hey. Thanks for taking my question. So let me flip it on its head. I know there are a couple of questions here on Northern California, but I still see a $46 million delta relative to 2019 levels. Can you maybe comment on the markets that are the highest in terms of exceeding 2019 levels of EBITDA, and how much more can you push, you think, your urban markets in 2024? Is that growth that you're expecting, is that coming from other markets besides Northern California? Or do you see a steady progress in all of your markets in 2024? Yeah, Floris. As I mentioned before, our performance this year has been driven broad-based. We talked about in our prepared remarks that Boston's strong given its citywide base and self-contained. It also has a strong base of BT. New York, we talked about leisure remaining strong and ramping as well as limited new supply. Atlanta's going to benefit from the backlog in the writer's strike. Southern California is going to benefit from San Diego citywides as well as it's just a strong economic base given the industries that it caters to. Louisville, we talked about being strong as well. Denver, which has got a good corporate base. Pittsburgh as well, Orlando. The diversification in our portfolio is more than enough to offset the slower ramp that we're seeing in San Francisco. Yeah. And what I'll add to that, Floris, is we put out an EBITDA bridge as part of our materials in Santa Monica and Boston, right? That EBITDA bridge was for the next several years and got us to north of $500 million of EBITDA relative to the I'm using round numbers, but roughly $450 million in 2019. And so we wouldn't have put that data point out had we not had confidence in the ability of the portfolio to get ahead of that. And what's driving that is obviously urban has been driving it to date. We believe the conversions and the incremental EBITDA associated with those ROI initiatives are driving that. But you have a portfolio for a reason, to Leslie's point. And there's going to be some markets that outperform and some markets that underperform. In total, we have confidence that we will go through 2019 over the next several years. Thanks. Maybe a follow-up question on San Diego. Presumably, you will not be able to buy the freehold in San Diego. It's just an extension of the lease. So can we assume some sort of similar type of cost going forward on that, or is there going to be a greater profit share that you're going to have to give away to the city or the, I guess, whatever local municipality that owns the freehold on that property? Floris, I appreciate the question, but we're in confidential negotiations, so I can't comment on your question. Fair enough. Maybe one additional follow-up then. For Sean, your weighted average term of your debt is relatively short at 2.9 years today. Are you waiting for rates to come down, and will you be looking to extend the maturity on your debts when that does occur? Or how are you thinking about the balance sheet and the term of your debt going forward? Yeah. Listen, as a general rule, we always want to get ahead of our debt maturities. We have a little under $400 million of maturities in the next quarter. We are in the process of extending $181 million of that, which is represented by two loans. We have extension rights under those loan agreements just for purposes. The combined debt yield of those two loans is 14.5x, right? These are low-levered, well-covered loans. We have the contractual right, and so we're just working with the lender right now to extend that. We will get that done shortly. The other is a $200 million loan that we are in the process of refinancing. We've got multiple options on that loan, which will add tenor as well. We've got great lender relationships. We've shown the ability to extend the debt, but those will then when we take care of that in very short order, and obviously, we'll have an impact of roughly half a year on the weighted average maturity. Thanks. That's it for me. Our next question comes from a line of Bill Crow with Raymond James. Please proceed with your question. Hey. Good morning. I'm just curious. Leslie, at ALIS, one of the main discussion points was all the deferred CapEx out there. It's not really a big issue for the REITs except for the fact that it kind of damages brand reputation. I wanted to get your perspective on whether the brands are doing enough, have enough discipline on the non-REIT owners, or whether we should really be concerned about the destruction of brand value. Bill, thanks for the question. I think the brands have been good partners for owners through COVID, creating opportunities for people to manage through that. They have been consistently stair-stepping back into capital programs and adjusting those in waves. They now have pushed back to more traditional levels of requiring PIPs to be executed in addition to putting programs in place, I hesitate to say penalties, but, programs in place to ensure that those get executed. I would also say is that owning hotels is an ecosystem. To the extent that an owner has pressure from that, that will create a catalyst for trading the asset, and that capital will get put in. The brands are, as transactions occur, being very rigid around ensuring that the capital plans get executed. I would say that, yes, there's somewhat of a backlog. I don't believe it's damaging the brand. I believe that what the brands are doing to ensure that the plans get done will cleanse the entire ecosystem. Great. That's it for me. Thank you. Thank you. Ms. Hale, we have no further questions at this time. I would now like to turn the floor back over to you for closing comments. Thank you, everybody, for joining us. The strong results that we've shown, and we expect to continue, are the direct results of what we've been executing around curating a portfolio that benefits from seven-day-a-week demand in key urban markets. We look forward to providing you additional updates as we progress throughout the year. Thank you again for joining us. Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.