Welcome to the RLJ Lodging Trust Second Quarter 2024 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's 2024 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 reconciliations to GAAP located in our press release. Finally, please refer to the schedule of supplemental information, which includes pro forma operating results for our current hotel portfolio. I will now turn the call over to Leslie. Thanks, Nikhil. Good morning, everyone, and thank you for joining us today. We were encouraged to see the industry's RevPAR growth sequentially improve during the second quarter, despite a choppy backdrop. The urban and top 25 markets once again led the way, which enabled us to achieve solid operating performance. Additionally, during the second quarter, we were active on a number of fronts, including acquiring Hotel Teatro in Denver, progressing on our 2024 conversions, as well as recycling proceeds from the sale of a non-core asset into opportunistic share repurchases while increasing our quarterly dividend. Overall, we were pleased with our results. Specifically for the quarter, we achieved RevPAR growth of 2.6%, which was driven by gains in both occupancy and ADR. May was the strongest month of the quarter, with 6.9% RevPAR growth, while June achieved positive RevPAR growth, despite the impact from the Juneteenth holiday and several weather-related events. This quarter, our market share expanded by a robust 170 basis points, underscoring the relative strong performance of our portfolio. Our urban portfolio continues to benefit from all segments of demand, with growth in business and group demand, driving robust RevPAR growth in our markets, such as Boston, Denver, Los Angeles, San Diego, Miami, and New York, while Atlanta and Austin were held back by a renovation in each market, respectively. Relative to segmentation, BT was once again our top-performing segment during the quarter, generating outsized revenue growth of 13%, balanced with an 8% increase in occupancy and a 4% increase in ADR as business travelers continue to expand their travel frequency. Corporate demand benefited from the ongoing expansion of travel from large corporations and resilient demand from the SMEs, which resulted in our midweek RevPAR growing by 4%. Our group segment had another solid quarter, achieving revenue growth of 5%, led primarily by ADR, which grew by 4.7%. Our group performance was driven by favorable citywides in many of our markets. Several significant events across our portfolio, such as the 150th Kentucky Derby and PGA Championship in Louisville, as well as our strong in-house group base. The attractiveness of our meeting space to small groups allowed our second quarter bookings to exceed last year by 19%, with 27% of our revenue activity booked in the quarter for the quarter. Overall, group booking trends remain healthy, as demonstrated by our current 2024 booking pace of 107%, which increased 100 basis points since the start of the quarter. With respect to leisure, we were pleased with our results this quarter in light of the continuing normalization of leisure rates across the industry and increased consumer price sensitivity. Our leisure room nights were up 2%, with healthy demand coming from markets such as Southern California, New York City, and our drive-to markets such as Charleston and Orlando. Although we are facing ADR headwinds, we believe that our portfolio is ideally positioned to attract demand in this environment, which also allows us to remain constructive on leisure demand. Overall, we were pleased with our total revenue growth of 3.4%, which exceeded our RevPAR growth, driven by a robust 6.5% increase in non-room revenues. The strong growth in our out-of-room spend underscores the contribution from our ROI initiatives undertaken over the last several years, which included reconcepting and redesigning of F&B venues, food offerings, and operating models. This has helped offset expense growth pressures and allowed us to generate hotel EBITDA of nearly $119 million. As it relates to capital allocation, we demonstrated the optionality that our strong balance sheet provides in the second quarter. We leveraged our pipeline of external growth opportunities to acquire the 110-room boutique lifestyle hotel, Teatro, in Denver for $35.5 million in an off-market transaction. This acquisition firmly aligns with our strategy of acquiring high-margin, rooms-oriented hotels located in heart-of-demand locations within seven-day-a-week demand submarkets. The hotel sits in a prime location within Denver CBD, just steps from the Denver Performing Arts Complex and Colorado Convention Center, which recently completed a multimillion-dollar expansion. We expect the property to achieve a stabilized yield of over 10% and should benefit from several ROI opportunities, which were not included within our underwriting. We also advanced our internal growth initiatives, which are allowing us to unlock meaningful growth that is embedded in our portfolio, including our conversions in Charleston, Mandalay Beach, and Santa Monica, which collectively achieved 10% RevPAR growth during the second quarter and over 16% during the first half of the year. Our conversions in Houston, Nashville, and New Orleans remain on track for delivering this year. The Hotel Tonnelle in New Orleans was recently completed and is already ramping well, achieving nearly 26% RevPAR growth during the quarter. The conversions of the Wyndham and Renaissance Hotels in Pittsburgh to a Courtyard and Autograph, respectively, remain on schedule for delivery by next year, and we look forward to providing an update on our Boston conversion later in the year. Additionally, this quarter, we accretively recycled proceeds from the sale of a non-core hotel into the repurchase of $5 million of shares. Finally, we increased our dividend for the third quarter to $0.15 per share, while remaining well covered. Turning to our outlook. Although the current economic backdrop is showing signs of moderation, we are optimistic that RevPAR growth will continue throughout the balance of this year, largely driven by demand, with urban markets expected to continue to outperform the industry. Our current view is rooted in the continued improvement in business travel and strong group demand, as well as muted new supply, particularly in our footprint. That said, we expect price sensitivity for the leisure segment to persist, dampening our growth expectations relative to the beginning of the year. As such, we are adjusting our full-year guidance to reflect our current outlook. Relative to this backdrop, we expect our urban assets to benefit from the continuing improvement in business travel, as well as urban leisure demand, which remains stable. Our second half should benefit from strong citywides in several markets, such as Boston and Chicago, and our strong booking pace, which is currently tracking double digits ahead of 2023, and the continuing ramp-up from our conversions. We are seeing these dynamics play out in our July performance. Longer term, we remain optimistic about the trajectory of lodging fundamentals, which over time, should benefit from growth in all segments of demand, given the ongoing consumer preferences towards experiential travel, especially against the backdrop of an elongated period of limited new supply. I will now turn the call over to Sean. Sean? Thanks, Leslie. To start, our comparable numbers include our 96 hotels owned at the end of the second quarter and include the acquisition of the Hotel Teatro in Denver, which we acquired during the quarter, and exclude the Residence Inn in Merrillville, Indiana, which was sold during the second quarter. Our reported corporate adjusted EBITDA and FFO include operating results from all sold and acquired hotels during RLJ's ownership period. As Leslie said, we are pleased to report solid second quarter operating results, which were in line with our expectations and demonstrated the strength of our high-quality, urban-centric portfolio. Our second quarter RevPAR growth of 2.6% accelerated from the first quarter and was driven by a 2.1% increase in occupancy and a 0.6% increase in ADR. Second quarter occupancy was 76.7%, average daily rate was $205, and RevPAR was $157.30. As was noted, our business transient and midweek outperformed. Second quarter business transient RevPAR grew 12.7% above 2023, including ADR growth of 4% and occupancy growth of 8%. RevPAR growth remained healthy in our urban markets, such as Boston at 10%, Denver CBD at 6%, Indianapolis at 27%, Los Angeles at 7%, San Diego at 24%, Miami at 19%, and New York at 9%. Monthly RevPAR growth during the second quarter was down 0.2% in April, primarily due to the impact of Passover, and up 6.9% in May and 1.2% in June, which was constrained by the midweek timing of Juneteenth. Total second quarter revenue growth of 3.4% outpaced RevPAR growth by 80 basis points and benefited from 6.5% growth in non-room revenues. Monthly total revenue growth was 0.7% in April, 6.9% in May, and 2.5% in June. Looking ahead, we expect the operating trends from June to continue in July, where RevPAR is forecasted to increase between 1.5% and 2%. Turning to the current operating cost environment, inflationary pressures continued to normalize during the second quarter. On a per occupied room basis, total hotel operating cost growth was limited to 5%, underscoring the benefits of our portfolio construct and our initiatives to redefine our operating cost model. We remain encouraged by the improving trends in our more controllable variable operating costs, which only grew 4% above 2023 on a per occupied room basis. Drilling down further into hotel operating expenses, fixed costs, such as insurance and property taxes, were the most significant driver of the increases in our hotel operating expenses, increasing 16% during the second quarter. We expect the year-over-year fixed cost growth to moderate by 500 to 600 basis points during the second half of the year as we lap the most difficult comps. Looking forward, we expect the hotel operating cost growth rates to moderate during the second half of the year. During the second quarter, our portfolio achieved hotel EBITDA of $118.6 million and hotel EBITDA margins of 32%. We were pleased with our operating margin performance, which was only 245 basis points lower than the comparable quarter of 2023, despite continued cost pressures. Turning to the bottom line, our second quarter Adjusted EBITDA was $109 million, and Adjusted FFO per diluted share was $0.51. We continue actively managing our balance sheet to create additional flexibility and further lower our cost of capital. Early in the second quarter, we addressed our 2024 maturities. Today, our balance sheet is well positioned, with $400 million available under our corporate revolver. Our current weighted average maturity is approximately 3.1 years, and 88 of our 96 hotels are unencumbered by debt. We ended the second quarter with an attractive weighted average interest rate of 4.75% and 71% of debt, either fixed or hedged. As it relates to our liquidity, we ended the quarter with approximately $770 million of liquidity and $2.2 billion of debt. With respect to capital allocation, consistent with what we have demonstrated, we intend to invest in projects to unlock the embedded value within our portfolio, selectively pursue acquisitions, while also remaining committed to returning capital to shareholders through both share repurchases and dividends. During the second and third quarters, we have been active under our $250 million share repurchase program. Year to date, we successfully recycled disposition proceeds towards the repurchase of approximately 0.5 million shares for $5 million at an average price of $9.66 per share. Additionally, our Board recently authorized a $0.05 increase to our quarterly dividend to $0.15 per share, starting with the third quarter. 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 balance sheet flexibility. I would like to now provide additional color on the assumptions underlying our updated outlook. Our revised outlook incorporates the second quarter sale of the Residence Inn in Merrillville and the acquisition of the Hotel Teatro and our second quarter actual results. As Leslie mentioned, the continued normalization in industry-wide weekend and leisure ADRs led us to update our prior guidance ranges. For 2024, we now expect comparable RevPAR growth to range between 1% and 2.5%. Comparable hotel EBITDA between $382.5 million and $402.5 million. Corporate Adjusted EBITDA between $346.5 million and $366.5 million, and Adjusted FFO per diluted share to be between $1.45 and $1.58, which incorporates shares repurchased to date, but no additional repurchases. Our outlook assumes no additional acquisitions, dispositions, or refinancings. We still estimate 2024 RLJ capital expenditures will be in the range of $100 million-$120 million, and now expect net interest expense will be in the range of $93 million-$95 million, which reflects the impact of higher base rates on our variable rate debt compared to our initial assumptions. Finally, please refer to the supplemental information, which includes comparable 2023 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 one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. First question, Michael Bellisario with Baird. Please go ahead. Thanks. Good morning, everyone. Good morning, Mike. Just first question on your guidance, kind of focused on the second half. What's the macro backdrop that you're assuming, you know, at the low end versus the high end? And sort of what are the risks that you're baking in, in that range, and then what would need to happen to be at kinda high end versus low end? Yeah. So, Mike, you know, the way that we sort of thought about our range is that clearly, there's signs that the economy is slowing. More signs came out this morning. We said that if the Fed was successful, that obviously travel wouldn't be immune to being impacted. The signs of it is affecting largely on the leisure side and obviously on. We're seeing it in rate, mostly driven. Our original range assumed at the low end, that the economy slowed down. Our current range bookends the low end of our original range, and it assumes, you know, obviously, that it's largely rate driven, and then that is, that's baked in all of our guidance. If we think about it from a standpoint of segmentation, clearly, leisure has been widely discussed. We're seeing the same thing that everybody else is seeing in terms of the consumer booking through discount channels, as well as not booking as early as they were before and booking later, and that's obviously translating into rate coming down on resorts, weekends, however you sort of cut and look at it. If we think about it from a BT perspective, our midpoint of our range still assumes that BT grinds forward, from a standpoint of who's booking, the frequency, the length of stay. We're still continuing to see Monday and Tuesday, Wednesday, move forward. The GDS still demonstrates that national accounts are continuing to increase and that SMEs remain strong. What's different for us, relative to our guidances, is that we previously assumed that the rate between... The difference between the rate of BT and group would converge. And what do I mean by that? Is that historically, historically, the gap between BT and group, BT was about 10-15 points ahead, of group. Today, BT is 20 points below group. And we thought that there would be some convergence on that. Our new house view is that, that, that gap remains. An example of that is that our BT rate grew by 4% in second quarter, group rate grew by 4.5%, you know, this quarter. As I look at the group side, you know, our current midpoint of our range assumes that, you know, that we actualize our group pace that we outline, but that the end of the quarter fourth quarter strength that we saw in the second quarter isn't as strong in the back half. And so that's what we're sort of seeing at the midpoint of our range. And so if you think about that, sort of pluses and minuses, on the bottom end, it would assume that, you know, demand on the leisure side is weaker than we originally thought, that leisure—I mean, that BT sees some degradation in demand, and that group doesn't actualize. On the top end of our range, you know, it assumes that BT has some convergence on the rate side with group, that urban leisure outperforms overall leisure, and that group is stronger, is the way that I would picture it. But I do think, you know, that we've right-sized, you know, our range based on, you know, the current fundamentals that we see, you know, overall. Got it. That's helpful to bookend it. And then, and maybe for Tom, just on the reduced weekend and leisure rate outlook, is that broad-based across the portfolio for what you're seeing? Any particular channels stronger or weaker? And then, is there any directive on your end to your operators in terms of revenue management to try to group up more to offset some of that leisure demand and pricing sensitivity? And that's all for me. Thanks. Yeah. Sure, Mike. So if you think about leisure markets, where we're seeing the price sensitivity, there's a couple things that I would say. You know, when you look at South Florida, Key West, Orlando, when you look in general, where leisure, you know, is, you know, shifting. And the other thing that we're noticing, because we have some hotels in Fort Lauderdale, is the cruise industry is doing very well. For instance, passenger volume is up about 31 million in 2023, surpassing 2019 by 7%. So there's a movement to cruise, and what we're finding on weekends is it's harder to get rate. Even though demand is there, you're having to make sure that you're priced appropriately to be able to get that demand. Another example, we were with, you know, Marriott the other day, and we were looking at redemptions, and redemptions are down. So we're trying to think through how to make sure we revenue manage the weekends, knowing that it's a little bit different in regards to who's coming and when they're coming, and Leslie even referred to when they're booking. To your point, we are absolutely changing and shifting to make sure that we're loading a little bit more group on weekends. You can see that not only group is up in demand, but it's up in rate. ... and the focus has been on making sure that we're booking more, whether it's SMERF or weekend groups, special event groups, everything we can do. The group, small group that Leslie referred to, though, is corporate groups. So we're still at about 50% of our group is corporate, and that's where we're seeing not only the BT, but the corporate group continuing to, you know, kind of grind forward. And that's helping us in banquets as well, AV, room rental. And so from a profitability standpoint, we're focused on the right types of groups to drive profitability. And hopefully, that helps you to answer a little bit. But it's not completely broad-based, but it's definitely in pockets where rates were a little bit more significant year-over-year. The thing I would add to your, to Tom's comments, Mike, is that, you know, obviously, as we've talked about before, 58% of our business is booked between zero and seven days. We're now starting to see more skewed to zero to three within that range. So it gives you a sense of how short the bookings are and how the revenue management has to be thoughtful, you know, as we go forward. That's all helpful. Thank you. Next question, Gregory Miller with Truist Securities. Please go ahead. Thanks. Good morning, all. So this is a related question on your full year outlook. Given the guidance cut, I'm curious about your conversations with your operators in terms of when they start to see this degree of leisure softness. And I mentioned that especially relative to your full year guidance that was reiterated last quarter and with no clear adjustment at June NAREIT. Thank you. Yeah. So Greg, I think your point is well taken with respect to as, you know, there are initiatives that we will put in place in conjunction with a softening economy. And so Tom mentioned on the revenue management side, you know, certainly grouping up contract business, et cetera, to make sure that we build a good revenue base. As importantly, in this type of environment, is to make sure that we are, you know, aggressive on monitoring costs within the business, you know, particularly wages and benefits, which are 40% of our total costs. And so, you know, making sure that those costs are flexed accordingly to the new revenue outlook. So I think that's an asset management initiative as well, to help mitigate some of the impact of the softening economy, which is reflected within the guidance ranges. I'll just remind you, Greg, when we were at NAREIT, we were a week after the best month of the year in May. So as we've just talked about the booking window, you know, when you're coming off of a pretty significant growth month, we were encouraged, and then obviously, we ran into Juneteenth, which was a shift in regards to what happened that week with BT and had to bounce around it. But I would say weekends, really, it's starting more in June and July, where you're starting to see the sensitivity when you look at Friday and Saturday. Even in the quarter, when we look at, you know, rate sensitivity, it's more on Friday, Saturday, where most of our RevPAR growth is midweek. So we are reacting quickly, and we're making sure that all our management companies are very aware of the revenue management strategy. And the good thing is our booking window is pretty short, so we can make some things happen quickly versus having to, you know, not being able to pivot, you know, when things are adjusting. Yeah, and I think the thing I would add, Greg, is that what we said on our last call was that as we moved into the summer, that we would have greater visibility, and here we are, with that visibility and able to reflect that in a thoughtful way, within the guidance that we provided. Thanks, all. And as for my follow-up, this is similar to Mike's question, and it's about the channel mix. In past cycles, when there's been some softness, the OTAs have taken additional share, and I think about this also from the perspective of your net RevPAR. Do you anticipate, just given the leisure softness today, that the share of demand from the OTAs is increasing or will increase for weekend demand and, and your leisure overall? Well, the way I think about it, Greg, is OTAs are an additional avenue, and they certainly lean towards weekend when you look at percentage of total. What we have seen, and these are all the reports that we've seen from Marriott, Hilton, and Hyatt for our premium brands, that the percentage is remaining the same. What I would say, though, is because you are needing to rely on that based on filling the house, if you will, and going back to my comment earlier about redemptions, we definitely need to turn on the valve, but we're not seeing an increase in OTA. The other thing that I would say is, we are making sure when we're pricing ourselves, we're thinking about what our best available rate is. Because many of our discounts, whether that's AAA, AARP, everything related to leisure is properly positioned. So when you think about trying not to give up too much rate, you can get people buying discount further out, but position it off of a BAR rate that is reasonable so that people are still paying a decent rate coming in. That's where the demand continues, but you got to vacillate on what rate you're getting further out, as well as that closer in booking. And so I think OTAs are gonna be consistently around the same. I don't see it as growing, but I would say that we are making sure that we're spending some digital marketing to enhance the ability to make sure the demand continues. Yeah, and the one thing I would add, Greg, to Tom's comments, is that on the leisure side, we're seeing our leisure mix and the adjustment driven by ADR, not by demand. Demand in leisure remains healthy, and so with a healthy demand, that would lead you to believe you didn't have to have a significant adjustment to your channels to a more discount channel, right? Because the demand is there. It's just a function of the pricing sensitivity from the leisure customers driving it. The last thing on channel distribution... Leslie made a comment earlier, GDS is up. That's a direct relationship to national corporations. The other channel that's up is property direct. That's related to how many people are, you know, putting groups in and rooming lists. And then the other thing that I would also point out when it comes to channel is we're really making sure we're monitoring the ability to, you know, put our payroll against where we think there's opportunity to grow market share. Leslie mentioned we were growing market share to 170 basis points, where there's national corporate, then there's local corporate negotiated. We're seeing growth in local corporate because our payroll is finding business that's in the local market that we're negotiating to make sure that we're taking share midweek, which is where the most amount of growth is. Okay, I appreciate all the color. Thanks. That's all for me. Thank you. Next question, Tyler Batory with Oppenheimer & Co., please go ahead. Good morning. Thanks for taking my questions. A lot of interesting commentary here. You know, Leslie, you made note of the gap, the rate gap between business transient and group. Can you explain that a little bit more? Why is there such a big gap? Why hasn't it converged like you expected? I'm assuming there's some mix that's going on, maybe that's impacting that. But if you could go more in depth and explain that comment some more, that would be helpful. Yeah, sure. I mean, I think, you know, Tyler, I think the historical relationship was that BT was your highest rated business, then group, and then leisure. I think the new normal has shifted, right, as we know. Leisure was strong to come back, group was second, and now BT is still ramping back. Your highest rated customer is just now coming back in the kind of last 12-18 months, plus or minus. And so it's been slowly grinding forward as we figure out the new normal between BT traditional, and I would say leisure, all of those things are, you know, playing into a role. I think also just leisure has been so strong, and so that sort of has shifted the dynamic. We're not suggesting that BT is gonna get back to the same historical relationship. We just know it should do better. And so whether close the gap means completely or incrementally, you know, our general house view is that it should do, it should do better, on that. You know, that's how I sort of think about it. The last thing I would add is, you have to also pay attention to your best available rate. Remember, over the last couple of years, we've been talking about dynamic pricing, and we've seen growth in the amount of demand that's going into that category. Because the national corporate accounts weren't coming back, but you had more SMEs who didn't have a discount or a fixed rate going into that category. And so that's where the pricing power was, and the demand still has shifted, so your best available rate has been the highest rate that we've had. And therefore, now that you're getting more corporate coming back, you're seeing that demand come with increases that you're getting, you know, on the national negotiated rates for those companies. Okay, some clarification questions to rough numbers. What percentage of your overall mix would you categorize as leisure? And what's really your definition of leisure? I know it's a little bit of an imperfect science here, but you know, is it just weekend business? Is it coming to the resorts? Just trying to get a sense of being as particular as we can in terms of what you're trying to communicate in terms of the leisure travel trends. Yeah. So we'll tag team on this one, Tyler. I would say that historically our mix was 20% group, 80% transient. Of the transient, it was 55% BT and 45% leisure. We think today that transient mix is probably 50/50. And then when you break down, obviously, if you look at transient on weekends, pretty much it's all leisure, and that would be anything that's booking on those weekends. I would also say you can look at rates that are discount rates that would travel midweek or weekend, would also be in the leisure category, Tyler. And so we look at, you know, things that I was just mentioning, AAA, AARP, where you can code to leisure. So we define it based on what the people are saying they're there for business or pleasure. Right, and we can also look at markets that are, you know, indexed to leisure as well. So there's lots of different ways to cut it, Tyler. Okay. All right, perfect. Okay, that's all for me. Thank you. Next question, Dori Kesten with Wells Fargo. Please go ahead. Thanks. Morning. You've been talking more about acquisitions over the past few months. Has your acquisition pipeline been growing, or would you describe it as more stable at this point? And then just as a follow-up, are there certain markets that you think would benefit from more clustering of your assets? Sure. In terms of pipeline, our team is always underwriting, Dori, and we're always having conversations. We focus on off-market transactions that generally take longer to curate. What I would say is that, as we've talked about on our previous call, that we're very much focused on assets that have unique situations. And, you know, so that's a smaller subset, you know, of our overall pipeline, and I would say that's generally been stable. Okay. And then you're bringing in Sage, who's a well-known operator in the U.S., but particularly knowledgeable about Denver for Hotel Teatro. Is getting to the 10% stabilized yield more of a top-line-driven thing, or does it lean into greater efficiencies? ... I think it's all, I think it's all of the above. I think that the upside is largely baked in, in the operating side of the equation, both top and bottom. By bringing in an institutional quality manager, by using aggressive asset management, and as well as looking at all the unique opportunities for ROI, all of that is driven on the operating side, whether it's a function of bringing in Sage, who has obviously the dominant player in this particular market and has subject matter expertise and clustering capabilities there as well, in addition to our natural lens on how to add value to a hotel. All of those things are operational based, top and bottom. Okay. And then the asset you sold in Indiana this quarter, I might be wrong, I'm just guessing it's from the original White Lodging portfolio from, I can't remember, 2005, 2006. Your the portfolio has changed quite materially over the last 15 years, like, RLJ has. Can you just remind us how many of those original hotels from back then are still within RLJ today? Yeah, I would. I don't have a number to give you, Dori, but what I would say is that we did a lot of heavy lifting in 2019, where we sold a lot of assets, and so reduced the number of assets from that portfolio. But by and large, you know, we're generally, you know, pretty happy with our overall portfolio. And what I would say is that we just have a handful of non-core assets. Out of a portfolio of 96 assets, you're always going to have a bottom in a mirror portfolio, and so we have a handful of non-core, you know, assets. You know, this is really kind of brick-and-mortar, you know, in our portfolio, and not stick-built assets. You know, this was an asset that we, you know, dealt with unencumbering so that we could execute a transaction, and then we were able to get it, to get it done, in an accretive fashion. But I would say, you know, by and large, just a handful of assets that we have left, that we consider non-core from that portfolio. Okay, understood. Thanks. Next question, Floris van Dijkum with Compass Point. Please go ahead. Morning. Question on capital allocation. Maybe, Leslie, if you could talk a little bit about the balance between new investments, share repurchases. Obviously, you returned some capital via higher dividend. How do you see that in light of, you know, certainly where your share price is trading today? Thanks, Floris, for the question. You know, I think this quarter really represents a perfect example of what we've consistently said. You know, our balance sheet gives us the optionality to pull more than one lever at a time. But you're always looking for the right window to be able to do that, and the volatility this quarter gave us the ability to do that. As you mentioned, you know, we were active on a couple of fronts. One, we obviously recycled the asset that we just got through talking about and took those proceeds and bought back shares accretively and on a leverage-neutral basis. We also continued to invest in our portfolio, and our conversions have been very successful. We're on a cadence of two per year. And then we increased our dividend as well, as well as we executed on the acquisition of Teatro. When you actually look at the capital allocation between the dividend and the buyback, it's pretty equal to what we paid for on Teatro. So it was about a, you know, well-balanced allocation. You know, we may remain constructive, and we are going to be disciplined about it. But we do recognize that in this climate, that obviously buybacks, you know, remain very attractive. Great. And then, maybe if I could, if I could, follow up, on, you know, the, the cash. Obviously, you got $375 million of cash still left on the balance sheet. How... Remind us again, how much you plan to spend on, for the rest of this year and, and, and in, and in terms of conversions and, and potentially what you have in the pipeline as well? Yeah, I mean, Floris, so the $100 million-$120 million of CapEx that we talk about for the year is inclusive of ROIs, conversions, et cetera. We've spent year to date a little more than half of that. And so, you know, you would expect us to spend the balance of that, you know, of that capital during this year. I think when you look, you know, sort of long term, and as we've talked about historically on the liquidity that we have, provides us the optionality to pull the right lever at the right time, and we've done that. I think on past calls, we've talked about being an all cash buyer has positioned us as an enviable position when it comes to to acquisition opportunities. Obviously, we, you know, we are going to be disciplined on that today, and we're going to be cognizant of the cost of capital elsewhere within our options. But I think our liquidity is a competitive advantage today. So I wouldn't view it as what we have to spend. I'd view it as what liquidity we have to provide as optionality. Thanks, Sean. Once again, if you would like to ask a question, please press star one on your telephone keypad. Our next question comes from Chris Woronka with Deutsche Bank. Please go ahead. Hey, good morning, everyone. Thanks for taking the questions. So Leslie, I want to maybe follow up on something you mentioned earlier, which was that the booking windows are, I think you mentioned, kind of trending towards the lower end of the historical range. I guess if you look back and, you know, 2020 is not going to be the right, the right, example, but maybe further back. Is that indicative of, you know, is that kind of like the first shoe, and then, then we just see further demand weakness? Or do you think that that booking window shrinking can be transitory? No, I think that, you know, historically, I think on a sort of pre-COVID basis, it was about 51% was booked in a zero to seven days, and now we're at 58% in a zero to seven. So I, you know, I think we're kind of a little bit in a new normal. Technology has improved, you know, transparency has improved. So I don't really see it as a canary in the coal mine at all. I think it's just behavioral, and you have to be able to revenue manage around it, which I think that, you know, we are, you know, pretty sophisticated and understand how the market, you know, understand how the consumer behaves. And so from, from our perspective, we just have to be nimble and respond to it. I don't see it as a canary in the coal mine. Okay, fair enough. Second question is just kind of if you were, hypothetically, you know, if you were to see further weakness develop, hopefully you won't. But, you know, are you prepared to go back to the brands that gave you a lot of flexibility during COVID? You know, would you ask for... Do you think they're in a position to give you a lot of flexibility? And also, are you guys able to, you know, you're running pretty efficiently right now, as far as I can tell. Are there still things you would look to do if RevPAR softens from here? Thanks. Yeah, I would say that, you know, we appreciate that the economic backdrop is showing some signs of softness. We do still continue to expect a soft landing. Keep in mind that we learned to navigate and operate in a zero-revenue environment through COVID. So there are lots of tricks in the bag that we have today that we necessarily have, you know, five years ago. And so we think our ability to navigate the current environment, even if it gets and softens further, is at a higher degree today than it probably ever was. And so we feel pretty good about being able to navigate in this environment. And I don't think we have to go back to the brands. Yeah, and then, Chris, with respect to efficiencies, we do think the second quarter is the high water mark with respect to the year-over-year cost increases. The reason why we believe that is really, you know, you can break it into two buckets. The first is the fixed costs, which are primarily property insurance and taxes. Our property insurance renews in November. We would expect to have a successful renewal there, and that there'll be an ease of premiums, you know, as part of that renewal in November, which will have a benefit to the fourth quarter. In addition, you know, we didn't have any property tax adjustments, you know, this quarter or last quarter, but you would expect us to be aggressively fighting for, you know, to make sure we're minimizing property taxes. So we think that, that becomes less of a headwind, you know, in, in subsequent quarters. And so that's why in my prepared remarks, I said I expect the fixed cost increases to wane that 500-600 basis points. The second item is on wages and benefits. Our wages and benefits, you know, there's opportunities there, so they were up sort of in the mid-single digits this quarter. But this quarter reflects a shift, you know, back from a higher contract labor percentage to more, you know, full-time employees. We had a roughly 25% reduction in contract labor this quarter. And so what that has shown up in is an increase in the benefit side, which was up in the low teens in the quarter. But what the quarter doesn't have, and where the opportunity is, is that you get efficiencies with a full-time employee versus a contract labor employee that we'll be able to see in future quarters. And so we feel good that you know that will have much better year-over-year comparability on our operating expenses relative to what we saw in the first half of the year. Okay. Very good. Very helpful. Thanks, Leslie. Thanks, Sean. Next question, Chris Darling with Green Street. Please go ahead. Thanks. Good morning. A question for Tom, probably. Can you speak to what you're seeing on the ground across the Bay Area? And maybe if you could delineate any comments between, you know, Silicon Valley relative to San Francisco proper and the East Bay. Sure. Good morning, Chris. I'll start with the good news. Let's go to Silicon Valley. We have definitely seen a little bit more project business come back. The back to office has helped. We're seeing a longer length of stay because we've got quite a few Hyatt Houses out there, Chris. And so we've seen a return from either Tesla, we got some accounts that have actually, you know, had, you know, 14, 15 rooms for 28-35 days, and we hadn't seen that last year, so we're seeing a nice increase. The other thing that I think we're seeing in Silicon Valley, where we spent a little bit of capital, we've seen a nice uptick at our Palo Alto, which is close to the Stanford University, and we're seeing business come back to us, knowing that we put the capital in, and that's kind of been a helping cause as well. When you go closer to the area of CBD, we work towards the airport. And what we are seeing there is, we're getting international contract business, and we're seeing more AI business from consultants come to the airport location. And we have an Embassy at Waterfront, an Embassy at South, and those areas have been growing share, in addition to seeing some volume increase. When you get to the CBD area, that's a whole another game right now. We all know that the year was set up where the first half was gonna be better than the second half. We're encouraged that 2025 will be better than 2024. We've got some special events that we're leaning in on, like the NBA All-Star game, as well as the, there's a sailing event that takes you know place in the summertime. But we do have a little bit of a harder setup for fourth quarter this year, as well as third quarter, because of citywides, and everybody's kind of talked about Moscone as being you know this is gonna be the tougher year between 2024 versus 2025. And that's - that gives you a pretty much round the bases, if you will, of Northern California. Okay, thank you for that. And then just another quick one for me, shifting gears, maybe for Leslie. As you kind of have conversations with various individuals in the market, thinking about the transaction market, any change in buyer/seller expectations, you know, in this slower kind of demand backdrop the last couple of months that you could speak to? No, Chris, I think not much has really changed since our last call. You know, the volume remains constrained. It's marginally better. There's activity pick up around BOVs and sort of soft conversations. But, I would say that, you know, given the fact that debt is available but expensive, the general perspective around rates coming down, low levels of supply and people focus on TTMs, you know, there still continues to be a gap in sort of bid ask. You know, but we will—you'll see how that sort of shapes up in the back half of the year. But by and large, that really hasn't changed since our last call. Okay, understood. Thank you all for the time. Thank you. I would like to turn the floor over to Leslie for closing remarks. Thank you, everybody, for joining us. We hope you have a great rest of your summer, and that it includes some level of travel. This concludes today's teleconference. You may disconnect your lines at this time, and thank you for your participation.