Good morning. Welcome to Service Properties Trust Q1 2022 financial results conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. To withdraw your question, please press star then two. Please note, today's event is being recorded. I now would like to turn the conference over to Kristin Brown, Director of Investor Relations. Please go ahead. Good morning. Joining me on today's call are Todd Hargreaves, President and Chief Investment Officer, and Brian Donley, Treasurer and Chief Financial Officer. Today's call includes a presentation by management, followed by a question and answer session with analysts. Please note that the recording, retransmission, and transcription of today's conference call is prohibited without the prior written consent of SVC. I would like to point out that today's conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. These forward-looking statements are based on SVC's present beliefs and expectations as of today, May 5, 2022. The company undertakes no obligation to revise or publicly release the results of any revision to the forward-looking statements made in today's conference call, other than through filings with the Securities and Exchange Commission or SEC. In addition, this call may contain non-GAAP financial measures, including normalized funds from operations or normalized FFO and adjusted EBITDAre. Reconciliations of these non-GAAP financial measures to net income, as well as components to calculate AFFO, are available in our supplemental package found in the investor relations section of the company's website. Actual results may differ materially from those projected in these forward-looking statements. Additional information concerning factors that could cause those differences is contained in our Form 10-Q on file with the SEC and in our supplemental operating and financial data found on our website. Investors are cautioned not to place undue reliance upon any forward-looking statements. With that, I'll turn the call over to you, Todd. Thank you, Kristin, and good morning. Our Q1 results reflect sequential monthly improvement throughout the period as comparable RevPAR increased from 63% of 2019 levels in the Omicron impacted month of January to 74% of 2019 in March, resulting in Q1 2022 RevPAR that was 69% of the same quarter in 2019. The improvement has continued into the Q2, with preliminary April RevPAR of $83, equal to approximately 82% of April 2019 levels. Room rates are beginning to approach 2019 figures, with ADR improving from 83% of 2019 in January to 95% of 2019 in April. Notably, our full service portfolio ADR has also returned to 95% of 2019 Q1 levels, highlighted by two of our best performers, Sonesta Hilton Head and Sonesta Miami Airport, achieving rates of 144% and 135% respectively of 2019 Q1 ADR, along with other leisure and urban hotels in markets such as Fort Lauderdale, San Juan, Scottsdale, and New Orleans, each outperforming Q1 2019 ADR by more than 110%. We have also seen considerable occupancy increases at some of our full service urban hotels. The Royal Sonesta Toronto increased occupancy from 26% in January to 76% in April, and the Royal Sonesta Austin improved occupancy from 35% in January to 82% in April. The recovery of SVC's suburban select service and urban full service hotels, which have historically generated approximately 75%-80% of their revenues from business-related travel or meetings, continues to lag our airport and resort locations, but that gap should close as more workplaces reopen and employees return to the office. While trailing 2019, group pace of SVC's hotel operators is considerably above 2021 levels in both room nights and revenues, specifically Sonesta, with pace increases of 37 of 38 comparable full service hotels. Sonesta is beginning to realize the benefits of its larger scale and increased national footprint to compete for more corporate business. While there are key markets Sonesta will need to further penetrate to maximize its reach, notably Miami and Los Angeles, they recently established a major presence in one of the top international hotel markets through the acquisition of four hotels totaling 918 keys in Manhattan. As part of the acquisition, Sonesta also purchased the intellectual property of a well-known lifestyle brand, The James Hotels, which it intends to scale across the Sonesta national portfolio, leveraging the brand's extensive industry-wide recognition. Sonesta has implemented multiple portfolio-wide initiatives to support performance, including utilizing its increased scale to renegotiate agreements with its OTA business partners, deployment of a new website and mobile app to improve brand.com contribution, and revenue strategies to capture incremental non-room income across the portfolio. As it relates to our ongoing plan to sell 68 Sonesta branded hotels, we have closed on 22 hotels for $238 million and are under purchase and sale agreements for 42 hotels for an aggregate price of $301 million. We continue to market 4 of the hotels for sale, one of which is under letter of intent. Pricing for the hotels remains in line with expectations we discussed in our Q4 earnings call, and we expect to close most of these sales over the balance of the Q2. While our initial timeline to sell these hotels has moved back as we work through negotiation, diligence and closing coordination with over 20 different buyers. Our goal with these dispositions is to maximize value to SVC, which we believe we will accomplish through sales to this buyer mix of smaller portfolios. It is also worth noting that the impact of the volatility in the debt markets has not had a material impact on our sales process and the prices we expect to achieve. Over 70% of the sale hotels are expected to be sold encumbered by long-term Sonesta branding, maintaining Sonesta's distribution, as well as benefiting SVC through our 34% ownership in Sonesta. The balance of the sale hotels has or will be rebranded or otherwise converted to an alternate use, such as workforce housing. As we have stated previously, this is an opportune time to be selling select service and extended stay hotels, given investor demand in the market. We are looking forward to optimizing the portfolio through the sale of many of our relative underperformers, so that we can focus on what we view as our core strategic Sonesta branded portfolio. SVC's non-exit hotels held a $36 ADR premium to the exit hotels and a $20 RevPAR premium during the quarter, and grew RevPAR by 80% over the previous year quarter versus 40% for the exits, highlighting the relative quality and performance of the retained hotels. As has been consistent throughout the pandemic, the weakness in the lodging sector has been counterbalanced by the stability of our diversified net lease assets. Our largest net lease tenant, TravelCenters of America, reported another strong quarter earlier this week. Our holdings of 8% of TA's equity provides additional benefits to SVC as TA continues to excel. Our other net lease tenants also continue to perform with strong collections and increased rent coverage. In 2022, we have 180,000 sq ft of leases expiring, representing 1.9% of our overall net lease rents excluding TA. This includes three tenants across multiple properties known to be vacating. We are evaluating both leasing and sale options for these assets. We sold two vacant properties for an aggregate sales price of $5.4 million in the Q1. Subsequent to quarter end, we have sold four net leased properties for an aggregate sales price of $3.5 million, and are under agreement to sell an additional five properties for $3.8 million, which we expect to close in the Q2. In closing, we remain encouraged by the accelerated wind down of many COVID-related restrictions and an increasingly positive outlook for a return to normalcy. With the improving trends in business travel and the solid performance of our net lease portfolio, as well as the progress we have made on our initiatives to reduce leverage through asset sales and improve liquidity, which Brian will discuss in a moment, we believe SVC is well positioned to benefit as the lodging sector rebounds with a higher quality and optimized hospitality portfolio. We're also looking forward to introducing the Sonesta brand and leadership team to market participants and highlight Sonesta's recent evolution as one of the largest hotel brand and management companies in the country at the rescheduled SVC Investor Day later this month in Chicago. The day will include a tour of four SVC hotels managed by Sonesta, as well as a presentation from the SVC and Sonesta management teams. The presentation portion will be webcast, but please reach out to investor relations for more details if you are interested in attending in person. I'll now turn the call over to Brian to discuss our financial results in more detail. Thanks, Todd, and good morning. Starting with our consolidated financial results for the Q1 of 2022, normalized FFO was negative $3.4 million or $0.02 per share, a $38.6 million increase over the prior year quarter. Adjusted EBITDAre was $90.1 million for the Q1, a $41.4 million increase over the prior year quarter. Although the Q1 is typically a seasonally weak quarter for our hotel portfolio and was compounded by the effect of the pandemic at the start of the year, these results exceeded our expectations from where we were projecting in February. Demand accelerated in late February and has continued through today. The major drivers impacting Normalized FFO over the prior year quarter include the results from our hotel portfolio, which generated $5.2 million of hotel EBITDA for the Q1 of 2022, compared to losses of $38.2 million in the prior year quarter. Guarantee payments that supported our hotel returns under our historical agreements declined $10.4 million, negatively impacting year-over-year comparisons. Net operating income from our lease properties for the Q1 of 2022 increased $5.3 million over the prior year quarter, primarily as a result of a decrease in reserves for uncollectible rents for certain tenants. Interest expense increased $3 million over the prior year quarter as a result of our revolver draw in January 2021. G&A expense decreased $675,000 or 5% to $12 million in the current year quarter, primarily as a result of lower legal and other professional service costs and lower business management fees due to RMR. We expect G&A to increase to approximately $13 million in the Q2, largely driven by annual non-cash stock grants to our trustees. Lastly, our share of Normalized FFO recognized from our 34% ownership interest in Sonesta increased $1.8 million or $0.01 per share over the prior year quarter. Turning to our hotel portfolio results, for our 295 comparable hotels this quarter, RevPAR increased 75%, gross operating profit margin percentage increased by 18.2 percentage points to 21%, and gross operating profit increased by approximately $56.8 million from the prior year period. Below the GOP line costs at our comparable hotels increased $12 million from the prior year, with increased management fees driven by higher revenues at our hotels and an increase in insurance costs, partially offset by a decrease in real estate taxes. Our consolidated portfolio of 298 hotels generated hotel EBITDA of $5.2 million. Our 157 extended stay hotels continued to have the strongest performance, generating $10.4 million of hotel EBITDA during the quarter. Our 49 full-service and 92 select-service hotels generated losses of $1.5 million and $3.3 million respectively. Extended stay performance has benefited from strong occupancy premiums relative to the industry and compared to our non-extended stay hotels with occupancy of 64.6% during the Q1, compared with occupancies of 46.3% and 44% respectively for our full service and select service hotels. Overall, RevPAR decreased 1.8% sequentially to $61.42 this quarter due to normal seasonality and the impact of the Omicron variant in January, but improved on a monthly basis from $48 in January to $83 in April, or 82% of April 2019 levels. We currently expect these trends to continue and are projecting full quarter Q2 RevPAR of $85-$88 or around 82% of 2019 levels. Regarding the remaining 62 of the 68 hotels to be sold as of quarter end, 22 of which have closed in April and May to date. These hotels generated RevPAR of $45.08 in the Q1, compared to RevPAR of $64.51 for our 236 non-exit hotels. Hotel EBITDA for the 62 remaining sale hotels was -$3.4 million in the Q1, compared to $9.1 million for the non-exit hotels. Despite the strong performance of hotels in leisure markets and in warmer climates, our hotels in certain urban markets were weighed on results this quarter. For example, our three full-service hotels in Chicago generated operating losses of $5 million in the quarter on RevPAR of $22. These three Chicago assets improved RevPAR to $59 in April, and we expect significant ramp up in the summer months. The Clift Hotel in San Francisco, another strategic asset for us, lost $1.6 million on RevPAR of $60 in the quarter. RevPAR more than doubled to $122 in April for this asset. Our full service assets in Kauai and Irvine, California, lost a combined $2 million in Q1 as they were negatively impacted by renovation disruption. Looking ahead to the Q2, we currently expect the portfolio's hotel EBITDA margins to be in the 19%-22% range versus just under 2% in the Q1 as we enter our seasonally stronger periods and demand continues to accelerate. Turning next to our net lease portfolio. As of March 31, 2022, we own 786 service-oriented net lease retail properties, including our travel centers, with 13.5 million sq ft requiring annual minimum rents of $372 million. Representing 42.7% of our overall portfolio based on investment, our net lease assets were 97.6% leased by 174 tenants with a weighted average lease term of 10 years and operating under 133 brands in 21 distinct industries as of quarter end. In addition to fixed minimum rents, over 90% of our net leased assets have some form of rent escalator to help mitigate against inflation through either fixed rent increases, CPI-based adjustments or percentage rents based on site revenues. The aggregate coverage of our net lease portfolio's minimum rents was 2.67 times on a trailing twelve-month basis as of March 31, 2022, an improvement from 2.58 times last quarter, led by our travel center properties and tenants in industries that were deeply impacted by COVID, including movie theaters and fitness centers. Turning to the balance sheet. Last month, we successfully amended our revolving credit facility and extended the maturity date to January 2023. As part of the amendment, we reduced the size of the facility to $800 million, extended covenant relief through year-end, and agreed to minimum liquidity levels to address near-term debt maturities. The amendment also allows for up to $300 million of acquisition and increases the limits on amounts SVC can fund for certain equity investments. We have one six-month option remaining, subject to meeting certain conditions, that could extend the maturity date further to July 2023. Turning to investing activity. During the Q1, we made $28.9 million of capital improvements at our properties and anticipate our capital spend for the full year of 2022 to be approximately $200 million. CapEx is being deployed to renovate our Hyatt Place portfolio, our full service Radisson Hotel in Salt Lake City, a dozen limited service Sonesta hotels, and to complete phased renovations at two full service Sonesta hotels. Our maintenance capital is expected to be around $70 million of our total CapEx. In April 2022, we made a $25 million capital contribution to Sonesta to partially fund their acquisition of the portfolio of hotels in New York City Todd mentioned earlier. We expect to fund another $21 million later this year as part of this transaction. After our $200 million pay down of the revolver and receipt of additional sales proceeds after quarter end today, we have over $900 million of cash on our balance sheet and expect another $300 million of sales proceeds by the end of June. Our next debt maturity is $500 million of senior notes due in August, which we expect to redeem with cash on hand. Under our debt agreements, the ratio of consolidated income available for debt service to debt service is required to be at least 1.5 times on a pro forma basis to incur additional debt. As of March 31, 2022, we remain below the minimum level at 1.32 times. We currently expect to exceed the minimum ratio as of the end of the Q3 of 2022. Finally, regarding our common dividend, we expect to maintain the current quarterly distribution rate of $0.01 per share through year-end 2022 as agreed to as part of our credit agreement amendments. Operator, that concludes our prepared remarks. We're ready to open up the line for questions. Yes. Thank you. As mentioned, we now will begin the question-and-answer session. To ask a question, you may press star then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we'll pause momentarily to assemble the roster. The first question comes from Bryan Maher with B. Riley. Good morning, Todd and Brian. Todd, congratulations on the promotion there recently. Can you talk a little bit about the expense side of the equation on the hotels? You know, where are you most concerned? Where's the most pressure coming from? I suspect labor is high up there, but can you talk also about maybe taxes, utilities, supply chain issues? Brian, I think you mentioned that margins were 2% in the Q1, expected to be 19%-22% in the Q2. How sustainable are those increases? You know, I guess the concern is we fade back from there after we get through the seasonally strong second and Q3. Can you give us some color on that? Thank you. Sure. Thanks, Brian, for the question. I'll start, then Brian can weigh in. You're right, on the expense side, labor is certainly one that we're tracking closely. We're seeing, you know, wage increases across all positions, front office, housekeeping, servers. We saw about a $3 hourly rate increase year-over-year, and there's a lot higher increases in the hospitality industry relative to retail as well. Our operators are increasing their recruitment efforts. They're offering referral bonuses, kinda looking at other things to retain employees, but there has been an impact. I mean, there's been more out of order rooms due to housekeeping shortages. You know, there's certainly a reliance on more expensive contract labor as well. You know, while unemployment overall is down, so is the workforce participation rate, and we're continuing to see hotel workers leave for other industries. They're going to work for Amazon or Uber or other. Just going out of the industry overall. We're also seeing expense increases, like you point out on the insurance side, as well as on the utility side. Real estate taxes, we're actually saving some money as we're going back and our operators are going back and challenging some valuations. We're seeing some decreases in real estate taxes. Overall, there's certainly inflationary pressures on a lot of the expenses. Yeah. As far as your question on the margins, Brian, you know, I think what I mentioned to Q2 was a range of 19%-22%. I would think in Q3, there's some incremental improvement there. Seasonally in Q4, there'd be some pullback, but nothing like we saw in Q1. You know, I expect a more modest pullback as we go through the curve of the seasons. Okay. On the Sonesta, you know, we did notice that Sonesta purchase of, I think it was four New York City hotels, and you mentioned the $25 million capital commitment. The $21 million later this year, is that further contribution to the purchase of those hotels, or is that going to some type of CapEx needed at those properties? Brian, I'll take that one. That was more of a liquidity thing for SVC. You know, SVC and Sonesta and their other shareholder agreed, based on liquidity constraints at SVC, to defer our contribution till we get more of the sale proceeds behind us. All in, SVC's 34% contribution would be the combined amounts. Yeah. I'll just add in, too. That 34% that is the equity portion of the deal. There is some renovations taking place as well at the hotels, but that will cover both the purchase price as well as any additional CapEx. That should be it after the additional contribution. Do they have to clear that with you first? I would suspect, as being a 34% shareholder, that you're going along with that? Yes. We had to provide consent. Okay. Just kinda shifting gears to RevPAR. Now that you've converted the Sonesta's the IHG and Marriott properties to the Sonesta flag, I think I don't know if it was a quarter or two or three ago, there was some optimism that you could get RevPAR back up to a comparable Marriott and InterContinental level. I don't think most of the buy side that I speak to thought that was realistic, but thought that the kinda puts and takes of being Sonesta and the more flexibility slightly lower fees, et cetera, made it worthwhile. now that you've had these for several quarters, what are your thoughts on the ability to push RevPAR at Sonesta, you know, mainly the select service, extended stay stuff, closer to those, you know, more, you know, bigger brands that they were before? Yeah. Brian, that's a good question. It's something we're looking at very closely as well and monitoring. I think it depends, and you noted it with the Select specifically, which is a new brand for Sonesta, or newer, relatively newer brand to the others. You know, we're seeing a lot more success in market share on rate and occupancy at some of the leisure hotels, some of the airport hotels. There is certainly more room to make up on the select service side. So that's something Brian and I are working closely with our asset managers from Sonesta to really create measurable goals for them. We are seeing them start to close the gap on those. As an example, in December, the Sonesta Selects, if you take out the exits, were at 73% occupancy index, and we set a goal for them to try to get to 80% by the end of the quarter. They did, they got to 79%. I think that's something we're going to do, and we're going to continue to monitor. We realize there's a gap to close to market, especially on the Sonesta Selects. The other area where we have more of a gap to close is on the Sonesta and Royal Sonesta urban hotels. I think a lot of that is the comparison is more heavily weighted to leisure hotels. Our full-service hotels have, at least on the Sonesta and Royal Sonesta side, more full-service urban hotels. I think as you know, the return to office and more business travel comes back relative to leisure, I think you'll see us close that gap. The focus for us right now is on the Selects specifically and we are performing comparably on a lot of the other service levels. Does that answer your question, Brian? Yeah. Sorry, you guys cut out there for a second. Last for me, and maybe this isn't a fair question, but I'm going to ask it anyways, having covered the company for almost 25 years. You know, you've evolved from hotels only to then travel centers to now net lease and, you know, I get a lot of calls, would you ever part with your travel centers, which, you know, are easily probably worth $3.5 billion if you need to raise capital. You know, can you maybe prioritize how you think of the importance of hotels versus travel centers versus net lease? Again, it's kind of unfair because TAs and net lease performed very well during the pandemic relative to hotels, but hotels were how the company was formed. You know, maybe your answer is we love all of our children the same, but, you know, can you give us thoughts on the prioritization within the firm? Sure, Brian. I'll take a crack at that. You know, as you point out, especially during the pandemic, given the cyclicality of the lodging industry, that our net lease, both TA and non-TA really has helped us during the pandemic, especially recently. I mean, TA didn't miss a beat at all. Our net lease, we had some challenges with our movie theaters and fitness centers, but those quickly recovered as well. I'm not sure how to answer the prioritization. I think and maybe you've asked this on previous calls, but where do you see the allocation of assets going forward, the mix? I think we see, you know, hotels being anywhere long term from 50%-60% of the portfolio, which they're right in the middle of that today. It's going to depend. You know, right now our focus is on getting through the asset sales and managing our liquidity. Ideally, we'll be in a position where we can be acquisitive again. A lot of that's going to depend on the relative value of acquisitions. I think that's one of the benefits of having the diversification is, you know, sometimes it's going to be more in favor to buy hotels, sometimes it's going to be more in favor to buy net lease. It gives us some flexibility there as well. Long term, I kinda... I don't know if that answers your question on prioritization or not, but long term, I think we'll still, you know, be above that 50% level on the lodging side, and then the remainder will be the net lease and the travel centers. Okay. That's helpful. Maybe we can kick it around more at Nareit, but thank you for your comments. Sure. No problem. Thank you. The next question comes from Dori Kesten with Wells Fargo. Thanks. Good morning. When you think through your CapEx spend over the next few years of about $200 million annually, should we expect operating headwinds in the first year, kind of neutral in the second, and tailwinds by the third? Yeah. I would say that, you know, we try to mitigate disruption on any renovation project. A lot of these projects, you know, go through the planning phases during peak seasons and, you know, they're measured and phased by floor to limit disruption. I think it'll be spread out, Dori. You know, it's a good question, and the exact timing is difficult to predict 'cause a lot of these projects are taking longer to get off the ground based on, you know, just market factors and supply chain issues and, you know, obviously rising costs. We might change scope if, you know, prices continue to rise. You know, typically CapEx, you know, is more weighted towards the back end of the year, you know, given our seasonally weak periods are Q4 and early Q1. Okay. Is there any plan within that now that Sonesta owns the James brand to rebrand any of your city center hotels with that brand? Yeah. Sonesta is evaluating the portfolio now, but I think you could see that. I think some of our hotels in Chicago and Washington, D.C., some of the former Kimptons, for example, I think would be a good fit for that. That evaluation is happening now, Dori. After the $500 million notes mature mid-August, they're paid down. I think you said in Q3 you should exceed your minimum covenant. Is that when you would expect to pay down the credit facility balance, or would you expect to hold on to the cash for some time longer? That's a great question. You know, there's still some things to play out as far as, you know, the 2023 notes that come due in June. You know, that's one of the things sort of tied neck and neck with the revolver and how we structured that last amendment. We have to make sure we have adequate liquidity to take out the June 2023 notes. Our expectation is by the end of the year, by the end of the calendar year, we'll be able to, you know, commence with normal refinancing activities and take out either the revolver and both the revolver and the senior notes. Yeah, we want to get back to being able to use the revolver as it's intended and not sit on cash. I think late 2022 or early 2023 is the best guess on timing. Okay. My last question is kind of back to Brian's about the margins. I think at prior peak you were in the mid-20 range, maybe 25% margins. I understand with these asset sales coming up, it should be slightly higher. But when you compare that to your peers, whether it's select or full service, they're materially lower. I'm just trying to get a sense is it the age of the hotels, location, management? Like what do you attribute most to those lower levels? What can you do to be, I guess, you know, higher 20s% to low 30s%, if possible? Yeah, that's something we monitor as well, Dori. You know, you know, especially on the Sonesta Select side of things, they are improving relative to the market, especially in terms of GOP margin. You know, our operators are looking at expense management strategies. One thing Sonesta has been able to do through their increased scale, not just on the managed side but on the franchise side, they've been successful in renegotiating the OTA commissions. They're looking at some of their, you know, with rising costs of food and commodities, they're looking at different ways to maximize their menu options and reduce costs that way. They have cost reduction initiatives in place to really try to help drive those margins up. Again, it's something, it's a fair point and something we're monitoring. I would just add. Okay. You know, that Sonesta Select brand, you know, it's a little under a year since that was launched. You know, we really want to be able to see business travel back in more force before we can, you know, sort of form any conclusions. We do expect the margins, you know, again, Q1 I think is an anomaly, and I think we'll get closer to that 20% range as we roll through going forward. Okay. Thank you. Thank you. This concludes the question and answer session. I'd like to turn the call over to Todd Hargreaves for any closing comments. Great. Thank you everyone for joining, and we look forward to seeing many of you at our investor day later in Chicago this month. Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.