The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Neil Lawrence Malkin - Capital One Securities, Inc., Research Division - Analyst
: Congrats on true cash flow positive, must feel great. Congrats. Sure. First one from me. Just in terms of acquisitions, external growth,
you mentioned in the call, I think, Liz, your ability to execute on your best practices from your large portfolio and long track record
and your ability to asset manage properly or better than most. That being said, are you kind of more willing to or maybe thinking
about getting more aggressive on acquisitions, potentially raising some capital to really kind of get some scale early on in this cycle,
particularly when a lot of the valuations are being priced out of '19. And we all know, based on all these changes to the model,
EBITDAs are stabilized or going to be significantly above that. Just kind of curious to how you're thinking about that side of the
equation? And you've kind of been closer to pulling the trigger on any acquisitions?
Question: Neil Lawrence Malkin - Capital One Securities, Inc., Research Division - Analyst
: Okay. Appreciate that, Justin. And then can you maybe talk about occupancy in April. Maybe talk about sort of occupancy thus far
into May and kind of what the pricing or ADR trends kind of look like for you? I guess -- and that's just relative to like the return of
your local and regional business travel. I think that's when you're really going to be able to change the mix, not just from leisure,
higher-rated leisure to getting in that business travel. So if you could just maybe talk about those sorts of things and the progress
on the nonleisure side of the book and just kind of pricing power over the very recent past?
Question: Neil Lawrence Malkin - Capital One Securities, Inc., Research Division - Analyst
: Okay. I guess another way -- in terms of that business, I mean, have you seen a market decrease in the spread in occupancy between
weekend, weekday, just as an indication that you're -- the first leg of the business travel, which is the local/regional are getting more
comfortable, traveling more, et cetera?
Question: Bryan Anthony Maher - B. Riley Securities, Inc., Research Division - Analyst
: Just 2 for me. When we look at the portfolio and what seems to have performed best lately, it seems to skew towards more of the
upscale suite extended stay-type product, whether that's the TownPlace, Home2s, Residence Inn, even the Embassy. Is that going
to skew what you look at when you go to make acquisitions? Or was their performance or I should say, outperformance recently,
more of an anomaly?
Question: Bryan Anthony Maher - B. Riley Securities, Inc., Research Division - Analyst
: Got it. That's helpful. And then you touched upon the likelihood of permanent margin expansion coming out of this COVID era and
cutting costs. Offsetting that clearly is going to be, labor cost, and it's really hard to kind of retrace labor costs downward once you've
kind of elevated them. How much does increased labor cost cut into that permanent margin expansion from other areas? So for
instance, maybe you thought margins might expand 200 or 300 bps. Does it cut into half of that? I mean, just a big picture?
|
