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spk06: Greetings and welcome to Ashford, Inc. First Quarter 2021 Results Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during a conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jordan Jennings, Investor Relations for Ashford, Inc. Thank you. You may begin.
spk01: Good day, everyone, and welcome to today's conference call to review results for Ashford for the first quarter of 2021 and to update you on recent developments. On the call today will be Jeremy Walter, President and Chief Operating Officer, Derek Eubanks, Chief Financial Officer, and Eric Batis, Managing Director and Senior Vice President of Portfolio Management. The results as well as notice of accessibility of this conference call on a listen-only basis over the Internet were distributed yesterday in a press release. At this time, let me remind you that certain statements and assumptions in this conference call contain or are based upon forward-looking information and are being made pursuant to the safe harbor provisions of the Federal Securities Regulations. Such forward-looking statements are subject to numerous assumptions, uncertainties, and known or unknown risk, which could cause actual results to differ materially from those anticipated. These factors are more fully discussed in the company's filings with the Securities and Exchange Commission. The forward-looking statements included in this conference call are only made as of the date of this call, and the company is not obligated to publicly update or revise them. In addition, certain terms used in this call are non-GAAP financial measures, reconciliations of which are provided in the company's earnings release and accompanying tables or schedules, which have been filed on Form 8K with the SEC on May 5, 2021, and may also be accessed through the company's website at www.ashfordinc.com. Each listener is encouraged to review those reconciliations provided in the earnings release together with all other information provided in the release. Also, unless otherwise stated, all reported results discussed in this call compare the first quarter of 2021 with the first quarter of 2020. I will now turn the call over to Jeremy.
spk05: Good morning, and welcome to our call to discuss our financial results for the first quarter of 2021. I will begin by discussing Ashford's operations and strategy. Derek will then review our financial results for the quarter, and then Eric will provide an update regarding our products and services businesses. After that, we will open it up for Q&A. I want to begin by thanking our associates for their relentless hard work during this unprecedented time. I can't tell you how proud I am of our executive leadership team, as well as our associates throughout the country. It's been a long year, for those of us in the hospitality industry. We're now seeing demand come back, and the recovery is here. As we look forward, I'm extremely optimistic about the future of our company. The key themes we are going to highlight today are we stabilized Ashford Trust and secured ample liquidity for that platform with years of runway, while the Braymar portfolio has already gotten back to cash flow positive at the corporate level. We are already seeing strong results in our third party growth initiative. We are ramping up our efforts at Ashford Securities and we have a comprehensive asset light business that is unique in the hospitality industry and well positioned for growth going forward. We believe the continued positive news around vaccine developments and distribution has created optimism for our industry. and we're starting to see positive trends in our operating results. Ashford advises two publicly traded REIT platforms, Ashford Trust and Braemar, which together owned 115 hotels with approximately 26,000 rooms and approximately $7.3 billion of gross assets as of March 31st, 2021. Braemar is currently benefiting from its focus on the luxury segment and specifically its luxury resorts, which have been the first properties to recover. During the quarter, Ashford Trust closed a $450 million strategic corporate financing that provides multiple years of liquidity. Both REIT platforms now have ample liquidity. Looking forward, with both REITs stabilized and performing well, we believe both are well positioned for the recovery of the hotel industry. and we remain focused on their future strategic objectives. Remington and Premier continue to execute on their long-term growth strategies. Both companies are benefiting from the improved demand trends we are seeing at our hotels, and we continue to believe that these two businesses are well-positioned to achieve growth with their third-party business initiatives. Both Remington and Premier have solid reputations, and neither has historically focused on third-party business. We're still in the early stages of this effort, but we have already seen strong momentum with Remington signing seven new hotel management contracts with third-party hotel owners and Premier signing 15 new third-party contracts. Looking ahead, we are extremely excited about the long-term opportunity for third-party growth at both Remington and Premier. We formed Ashford Securities in 2019 to be a dedicated platform to raise retail capital through financial intermediaries and the broker-dealer channel in order to grow our existing and future platforms. Our goal for Ashford Securities is to provide the market with highly differentiated alternative investment products. Types of capital raised may include but are not limited to non-traded preferred equity, non-traded convertible preferred equity, and non-traded REIT common equity for future platforms. I'm sure security is ramping up nicely and we anticipate beginning fundraising sometime this year. We're excited to pursue a fresh source of capital that will help us grow all of our platforms over the long term and all with the goal of increasing shareholder value. One of the businesses where we are seeing strong growth is Red Hospitality. Red Hospitality and Leisure is a leading provider of water sports activities and other travel and transportation services in the U.S. Virgin Islands and in Key West, Florida. Red had a very strong quarter, driven by strong leisure demand in its markets. Red anticipates that these markets will continue their strong performance in the coming months. Additionally, the products offered by Open Key and Pure Wellness continue to thrive in this environment. As the hotel industry strives to implement measures to provide a clean and safe environment, many hotels and guests are seeking automatic check-ins, allowing them to bypass the front desk with keyless entry and secure digital key capabilities. The industry is also seeking enhanced sanitation and air purification standards within the guest rooms. We believe the benefits that Open Key and Pure Wellness offer will position them well to achieve accelerated adoption and growth of our hotels nationwide. Looking ahead, we believe we have a superior strategy and structure that is unique within the hospitality space. We're starting to see the recovery in our industry and are also seeing investment opportunities of very attractive, unlevered returns that we did not see pre-pandemic. There are four ways our business can grow from here. The recovery of the hospitality industry and higher hotel revenues. An increase in our assets under management. Growth over third-party business. and the acquisition or incubation of additional businesses. For investors seeking exposure to an industry significantly impacted by the pandemic, we believe Ashford is an attractive option. In fact, in the coming weeks, we plan to publish an investor presentation that outlines the growth prospects we see for our businesses over the coming years. We believe the growth story for Ashford is compelling and look forward to sharing our perspective with investors. I will now turn the call
spk02: Over to Derek. Thanks, Jeremy. Net loss attributable to common stockholders for the first quarter was $17.1 million. Adjusted EBITDA for the first quarter was $5.5 million and adjusted net income for the first quarter was $4.8 million. Adjusted net income per share for the first quarter was $0.65. In terms of financial results for our portfolio of companies, I'll provide some highlights and then Eric will discuss more details. During the quarter, Ashford Trust completed a $450 million strategic corporate financing, drawing $200 million. Ashford Trust has also continued to make significant progress in converting its preferred stock into common stock and has exchanged approximately 13 million shares of its preferred stock, representing approximately 58% of the share count prior to the exchanges, into approximately 85 million shares of common stock. Also during the first quarter and subsequent to the end of the quarter, Ashford Trust raised approximately $89 million from the sale of shares of its common stock. Braymar also raised equity capital of approximately $26.4 million from the sale of shares of its common stock during the first quarter and subsequent to the end of the quarter. Braymar has also exchanged some of its preferred stock for common stock. To date, Braymar has exchanged approximately 1.2 million shares of its preferred stock, representing approximately 19% of the share count prior to the exchanges, into approximately 4.5 million shares of common stock. These capital raises and exchanges have helped shore up both REITs' liquidity and lower their leverage. Lismore recorded revenue of $4.3 million in the quarter related to its agreements with Ashford Trust and Braemar to seek modifications and forbearance for the REITs debt. This forbearance effort is mostly completed, but Lismore will continue to record this revenue over the remaining term of the agreement, which expires in April of 2022. Remington realized hotel management fee revenue of $4.5 million in the quarter, net loss attributable to the company of $2.2 million, and and adjusted EBITDA of $1.5 million. For the first quarter, Premier had project management fee revenue of $1.5 million, net loss attributable to the company of $2.4 million, and adjusted EBITDA of negative $0.1 million. OpenKey finished the quarter with 236 hotels under contract. This growth was driven by a significant shift in guest preferences with utilization of digital keys increasing by 118% in the first quarter over the prior year quarter, with the majority of guests from January through March opting to use a digital key when offered. Financial results for JSAV for the first quarter included revenue of $3.6 million, net income attributable to the company of $0.3 million, and adjusted EBITDA of negative $1.4 million. As of March 31st, 2021, we had 7.3 million fully diluted shares of common stock and units, which included 4.2 million common shares associated with our Series D convertible preferred stock. We had 2.7 million common shares issued in outstanding, 0.2 million common shares earmarked for issuance under our deferred compensation plan, and the balance relates to some restricted stock. I will now turn the call over to Eric.
spk03: Thank you, Derek. We are excited to give an update on our products and services businesses and their impressive start to the year. There are many positive takeaways from the first quarter, including record performances, third-party business generation from new sales personnel, and penetration into new markets with massive opportunity. We will spend most of our time talking about the quarter as a whole, but it is worth noting the momentum we are experiencing within the quarter itself. Cumulative March revenue was over 40% higher than the average of January and February. The momentum is palpable and growing each week. Associates across our platforms continue to do an incredible job and the first quarter provided a jumpstart to the significant recovery we expect in 2021. Our focus has been shifted to growth mode as our businesses aggressively pursue new business and hire on a daily basis to support increasing demand. As a reminder, our core strategy is to invest in market-leading businesses with talented management teams and growth opportunities supported by attractive macro dynamics. Through a multi-pronged approach, we aim to accelerate growth and create shareholder value through rigorous industry research, the implementation of best operating practices, and the execution of bolt-on acquisitions. We are also able to utilize our extensive relationships, and refer these businesses to our advised REITs, ensuring their hotels receive world-class service with attractive pricing. The first business I'd like to discuss is Red Hospitality and Leisure, a leading provider of water sports activities and other travel services in the U.S. Virgin Islands and Key West. Red had the best month in the history of the company in March in terms of revenue and EBITDA. With expectations for a strong second quarter, as tourism activity in RED's markets remains high, we would like to congratulate and thank CEO Chris Batchelor and his team for an amazing start to the year. RED has an exciting future with several near-term organic and inorganic growth initiatives, and we look forward to keeping you updated on their progress. Another business that continues to grow is OpenKey, which provides Bluetooth-enabled lock upgrade modules. These modules are added to existing locks at a fraction of the cost of replacing an entire system, saving their clients money while satisfying guest demand for a contactless check-in experience. While OpenKey's operating metrics continue to be strong, we also have some major developments to announce. As we mentioned on our last call, OpenKey signed a master services agreement with a major hotel brand in the fourth quarter. This agreement makes OpenKey the preferred provider of mobile room key hardware and services for the brand's more than 9,000 properties worldwide. The agreement is in the pilot phase, and we look forward to being able to provide more details on this MSA in future quarters. The second major announcement is that Open Key has also recently signed a master services agreement with Four Seasons Hotels and Resorts to be their preferred provider of mobile room key services. Four Seasons is one of the most well-known luxury hotel brands worldwide. We are excited about these recent developments at OpenKey and look forward to sharing more details in future quarters. Remington is a dynamic hotel management company providing best-in-class service and expertise to hotels across the country. Hotel operations continue to ramp and to satisfy demand, Remington has rehired nearly half of its previously furloughed employees with more than 375 current job openings. CEO Sloan Dean and his team were awarded two verbal and one signed third party management agreement in the first quarter, two of which are expected to begin soon. We expect a robust 2021 recovery for Remington as they focus on adding new third party contracts to their roster of 79 hotels across 15 brands and 23 states in Washington, DC. Premier provides comprehensive and cost effective design, development, architecture, procurement, and project management services. The company continues to add staff in order to support its growth efforts, including the addition of two new sales leaders in January. Premier is doing a fantastic job with its recent initiative to penetrate the large and growing multifamily market, which meaningfully expands the scope of opportunities available to it in addition to its hotel project management business. Premier's 2021 has been highlighted by one new multifamily contract and three new hospitality contracts, totaling $2.3 million of fees. With its two new sales leaders and a focus on penetrating the large multifamily market, we anticipate strong performance from Premier as capital investment rebounds. JSAV is a leading single-source solution for meeting and event needs with an integrated suite of audiovisual services. including show and event services, hospitality services, creative services, and design and integration. CEO Chuck Bowman and his team have done a tremendous job navigating a difficult year. In response to slower business travel over the last year, JSAV proactively shifted its focus to virtual meetings and successfully established numerous virtual showrooms across the country. These virtual events are augmenting an already growing pipeline as JSAV aggressively pursues in-house hotel AV contracts alongside these virtual meetings. The month of March generated $1.5 million of revenue, which is more than a 60% increase over the previous 11-month average. JSAV was verbally awarded two new contracts, and we expect momentum to continue with group business travel picking up. Pure Wellness provides wellness applications designed to eliminate viruses, bacteria, and other contaminants within guest rooms, offices, and public spaces. Pure's first quarter is highlighted by 13 new contracts added to its recently launched Pure Office technology. This technology uses advanced surface protection and purified air to eliminate 99.99% of contaminants. Employees are increasingly returning to their offices, and Pure Office will give employers and employees alike comfort in returning to a safe and healthy workplace. Lastly, I'd like to discuss Ashford Securities, our retail capital raising platform. Jay Steigerwald and his team continue to build out the organization with first quarter hires of two national account executives, as well as senior operations and compliance personnel. Ashford Securities is continuing to make progress on Braemar's non-traded perpetual preferred security and recently updated the offering documents through an amended S3 filing. The company launched its broker-dealer signup effort in April and expects sales efforts to continue ramping through the second quarter. We continue to believe there is a substantial opportunity for Ashford Securities to offer differentiated product structures and strategies to retail investors. In short, we're excited to pursue a fresh source of retail capital that will help us grow all our platforms over the long term with the goal of increasing shareholder value. That concludes our prepared remarks, and we will now open up the call for Q&A.
spk06: Thank you. Ladies and gentlemen, at this time, we will be conducting a question and answer session. If you'd like to ask a question, you may press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 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 key. Our first question comes from the line of Tyler Vittoria with Janney Capital Markets. Please proceed with your question. Good morning. Thank you.
spk07: There's a couple of questions for me here and some nice progress, I think, that you're making on the third-party business at Remington and Premier. Just interested... how that has gone versus your expectations. And do you think that there are more opportunities than you had originally anticipated to grow the third-party side of things, just given some potential disruptions out there from the pandemic?
spk05: Yeah, this is Jeremy. Appreciate it, Tyler. Yeah, I'd say that probably, like, if you go back when we bought – Remington and then Bob Premier, I think we would have thought as we stand today that we'd be maybe further along in our third party developments, but that was largely driven because of the pandemic, obviously. What happens with third party property management is that transactions definitely stimulate more opportunity to gain more contracts and there just haven't been that many transactions. But I do believe that given just recent developments that we're already at seven hotels, which is a decent percentage of our total portfolio as we stand today, I think we're proud of what we've accomplished recently. And we're very optimistic of what we see going forward. I mean, we've got a very robust pipeline. I think we've got an incredible business development team over at Remington. probably as good a leadership as anyone else would have with Sloan. So I do think that it is an initiative that will prove to be very successful as we look maybe in another couple of years and look back, and I'd be very optimistic on what we think we can achieve over at Remington. The second part is Premier. And Premier, I think, if we were to sit down as a management team and say where we think We might have the most opportunity. We can make an argument for each one of our businesses, by the way, but I think Premier a lot of times wins that argument just because it's such a fragmented landscape, and there's a tremendous amount of market share that Premier would be able to gain with just a little bit of business. we've gained, I think we've reported that we're up to 15 contracts. And I think our first contract, if I recall, was March of 2020. And so I think we've been very pleased with our progress at Premier through the pandemic. And one of those things is that we don't have to just play in hospitality. As we've mentioned in previous quarters, that there's a strong demand for our services and multifamily services. And so we've always looked at our market share when we bought Premier to be an opportunity within the hospitality sector, but then when you expand it to other forms of real estate, it's just a huge market potential. And I do believe you can make an argument that within each one of the verticals within Premier, which is design and architecture and then purchasing and then project management, construction management, corporate engineering, we have some of the best service providers with each one of those landscapes. And so it is a very unique offering, and we're excited to see the potential growth that we've got. I'm very optimistic that we have the right leadership, and we've just created really a business development effort. I think we brought on two folks in January of this year. So most of our business that we were able to get was without a sales team. And so... And one of the other things that we're seeing as well as new recent development is that we've got some big transactions that they're doing, and we're getting recurring business from those owners. And so there's one ownership group that we're talking about a third renovation now already, and it's a nice-sized project, all three of them. And so there's just so many different ways that we can grow within each one of these businesses. And the good news is, and this is something that we're going to highlight with you guys going forward on our optimism of our platform, is that even if we don't get third-party growth at Remington and Premier and we just get back to 2019 levels, there's a pretty compelling investment opportunity, we believe, with Ashford, Inc. And so when you add the potential of third-party growth on top of it, we're very excited about our prospects.
spk07: And then at REB Hospitality, obviously the results there are quite strong. Can you talk a little bit more about the growth potential for that business as well as expansion opportunities in the new geographies as well?
spk05: Yeah, yeah. You know, let me pin back the question to you because you've been to the U.S. Virgin Islands and you've seen the offering there. We talk about it on these calls. And I don't think a lot of investors and some of your peers really understand fully what this business is, but I think you would agree that it is a pretty unique and luxury experience that we offer in the U.S. Virgin Islands. Would you agree with that?
spk07: Yes, absolutely. I think also Chris is a great person to have in his role in terms of not only operations, but certainly expansion for the business as well.
spk05: Well, I appreciate that. Chris is not only an important part of our team and leadership, but he's developed to be a good friend of mine as well, and he just is fantastic. And so I think what we have with Red is what we have with Remington and Premier is that we can go into any market, certainly in the U.S., and compete and win. We've already proven that because we entered into Key West, and bought Sebago and we utilized our best practices to really, uh, transform that company. Uh, it's been a wildly accretive acquisition. And if you look at March, uh, I think that was the most profitable month on record, uh, in, in Red's history and Key West history at Sebago. And so, uh, we just, we're just very, uh, optimistic of what we can do, uh, in any market. Uh, and it's not just, it's not just limited to boating, uh, it's our concierge services as well. which I think is a really unique offering. And it's unique in that in U.S. Virgin Islands, the concierge is a very guest, high-impact touchpoint. And Ritz-Carlton, as you know, does not like to outsource anything if they don't have to because they want to have control over all the guest interactions. But Red oversees concierge services at Ritz-Carlton and St. Thomas. And they do a fantastic job, and it's just a great business model for us because you get commissions on everything you refer out. And it just gives you the ability to kind of be the initial touch point for all different types of add-on services you can do as well. So we got into QS. We have expanded in other hotels. And as we said today, we've been verbally awarded a nice contract that's in Turks and Caicos that we're looking towards penciling. So we believe we'll be in a new market that we'll be able to share with you more details in the upcoming quarter. But that's a near-term business opportunity. And it'll be the same thing that we offer essentially at Ritz St. Thomas, but even more so because – will be overseeing the cabana sales as well. So I think there's a lot of markets, certainly domestically in the U.S., but then also in the Caribbean.
spk07: Okay, excellent. And the last question for me, when we look at the recovery playing out over the next couple of quarters, years here, just help us think about your various products and services, businesses, which do you think are poised to return to 2019 levels first? versus others. I know you can't give specific guidance or numbers around that, but just curious your thoughts in terms of which of those businesses could, quote, unquote, return to normal first.
spk05: Yeah, I'm just writing them out on a piece of paper. I'm going to talk through each one of them, so just give me a second here as I do this. Okay, so let's start with the two that I think are going to exceed 2019 levels this year, and I think that's going to be OpenKey and Reds. are going to do that. That's fantastic news. We're very optimistic about those two platforms. There are a lot of accretive acquisitions that we have at Red and also vertical integrations that we have that have high cash on cash returns. I think that we're already there on a couple of businesses and we will continue to see great growth in both of those businesses. Premier is going to be a little bit slower to rebound because of the capital spend that we've cut at the REITs, but as we ramp back up to 2019 levels, from a hotel revenue perspective, we should be exceeding profitability of Premier, I would hope, because of our third-party efforts. So just go back to a 2019 level, at Premier, which basically only had two customers at that time. If you fast forward and you say the recovery is going to be in 2023 or 2024, whatever you believe as an equity analyst, I think the Premier should be hopefully greater than where we stayed in 2019. Remington, same case, because, again, the third-party efforts that they should exceed hopefully profitability once we get back to a steady state within the industry. And we have some opportunities there that we can continue to deploy some capital to continue to get more contracts, control more deals with other owners. And then potentially there are some management companies because of the pandemic that if we wanted to acquire it, it may make sense to do that. Then you go to JSAB, and that's clearly going to be the one that's going to lag. If hotels get back to 2019 numbers, events and meetings are going to lag that because it's just going to be maybe probably another year or so after 2019 numbers that we're back to where we should be from a group and meetings perspective. That's hard to know because we do see a lot of pent-up demand in the group business, but we definitely think it's going to recover a little bit slowly. But what I would argue against that from a growth perspective is that JSAV is our largest third-party business that we've got. Most of its business is outside of Ashford. And I think we have an incredible team there, both from a sales effort and a leadership effort, across the board that I believe will continue to grow that business outside of Ashford. And so we don't necessarily need the hotel industry to recover to previous levels to see outsized growth of that platform because we will pick up new contracts. We will grow outside of Ashford. And I think it could be maybe the highest growth potential on a third-party basis. And what I would say is you can look back again to 2020 and the numbers we posted in January and February. of 2020, late in the cycle, and how much growth JSTD had. I believe off the top of my head, and I don't quote me on this, but you can go back and look, I think it was north of 70% year-over-year EBITDA growth in January and February. I don't know that we necessarily reported that because March obviously dipped so low, but we were just very optimistic with what we were doing from a growth perspective. And you saw that as well because we bought it, I think it was like $4.5 million of EBITDA, We believe pro forma EBITDA for 2020 probably would have been closer to $14 million. So within a short period of time, we were looking to basically triple the growth of that company. So I think all of them, you make a case that they're going to have outsized growth.
spk02: Hey, Tyler, it's Derek. The other thing I think we should point out is that if you look at our 2019 actual results, we reported $38 million of adjusted EBITDA in 2019. But that only included about two months of Remington because we closed on the Remington transaction November of 2019. And so that did not include about $20 million of Remington EBITDA that would be pro forma that they would have had prior to the closing of that acquisition. So if you look at our 2019 results, you really have to look at it pro forma for having Remington because we did not have it for the entire year, which would add about $20 million to our reported 2019 results.
spk07: Okay. Very good detail. I appreciate all of that. That's all from me. Thank you.
spk06: As a reminder, ladies and gentlemen, it is Star 1 to ask a question. The next question comes from the line of Brian Marr with B Reilly. Please proceed with your question.
spk04: Good afternoon. So, not much left after that, but I got a couple. Can you clarify, a little unclear to us, maybe we're just missing it, on OpenKey and acquiring the non-redeemable, non-controlling interest. Is your position now, is it 75%? Is it higher? Is it 100%? What is the ownership stake of Ashford Inc. now in OpenKey?
spk02: Yeah, it's 75%, Brian. Okay.
spk04: And the Four Seasons deal, does that span all of the Four Seasons hotels globally? Yes.
spk05: I believe it does. I want to, I want to get back to you on that. Uh, it was just a new recent development. Uh, but, but yeah, it's a, it's a, it's a big opportunity for open key.
spk04: Okay. And then labor costs, we continue to hear this across all of our covered REITs, you know, with the extended and enhanced employment benefits that the government's doling out. What, what are you seeing as it relates to, you know, kind of re onboarding, you know, furloughed employees over the past year? How difficult has that been for Ashford and Remington?
spk05: It's been difficult. It's definitely a challenge, and it's definitely been difficult to get people back to work, and certainly in certain markets. So it's been a struggle at Remington. It's actually been a struggle for Red, particularly in Key West. Just access to labor... has been difficult. And you wouldn't think that would be the case given just the general state of the economy and unemployment rate, but it's just because the premium unemployment benefits that were put in by our government have created the wrong incentives for folks to come back to work, unfortunately. So it's something we're dealing with. It's just something we'll have to continue to deal with. We've been very creative on how we can access labor But we're hopeful this is only a short-term issue. Unfortunately, it is a little draining for our teams, Brian, at all levels, because they've been through so much over the course of last year, the management teams, the supervisors, and any of the employees that are already working. They're doing more with less resources, and we want to address that as quickly as possible. But our hands are tied a little bit until September or October of this year. But hopefully, like I said, it's a short-term issue. But the only positive thing I'd say is that we've really dissected all of our businesses, each one of them, at a very granular level. And so not only once we do get to appropriate staffing levels, those appropriate staffing levels will be at a level, we believe, lower than what they were pre-pandemic because of a lot of efficiencies we have uncovered as a part of basically being forced to. through the challenges we had over the last year. And so hopefully there will be some good long-term benefits from it.
spk04: Great. And just last for me, and I would say that we had been truly impressed by JSAB post-acquisition and as it grew through and into the first quarter of last year. So that has to have been really painful for And given its importance and ability to do pretty dramatic revenue and EBITDA numbers, I heard your comments to Tyler on, you know, it's going to lag. But what is the pulse of the market that you're hearing via JSAV to get that business ramped? Are there any early shoots out there that we should be thinking about? And how much of a lag do you think it is maybe as measured in quarters to a decent return of business transients?
spk05: Yeah, I'll take that, and then if Eric has anything, he'll comment on it as well. But as we sit right here, listen, that team, we have put them through hell. I mean, it's been terrible what the team has had to go through. I mean, I think we went from 500 associates down to 38 in the course of a week, and that wasn't enough, so we went down to the next week or so down to 26. I mean, it was crazy, and that was in March. And it was definitely the business that was the strongest right before the pandemic. and then certainly the most challenged and weakest during the pandemic. But I can tell you that I'm incredibly proud of that acquisition as we stand today. I'm incredibly proud of the leadership we put in place. I would love to be able to showcase them at a future investor day because it's just incredible, incredible leadership that we've got within that organization. And they've got a really good competitive advantage, I think, going forward because – it's a great team and there's great growth prospects. But you're right, it will lag the transient for sure. I don't know if we're talking – it's certainly not months. It's going to be quarters, and if not, maybe a year or so until it gets back to where – it gets back to pre-pandemic levels versus transient demand. But – But we are very optimistic. And the green shoes we're seeing is that I actually, for that one of our businesses, I actually approved weekly payables at that company because we just have been very tight on cash flow within JSCV. And I asked them to give me a week-over-week change in revenue. And over the course of maybe the last probably six weeks is when it turned because every time I would see the week-over-week change, revenue is falling out of our pipeline. And we do have probability adjusted of what we think revenue is going to be for the next four quarters. So in the quarter, the next quarter, and then the next two quarters. But over the last six weeks, every single week, we're adding more and more revenue to our pipeline, which is fantastic. And that's a forecasted pipeline. So our forecasts continue to go up. week over week. So there definitely is green shoots. It's still going to be a little bit more of a walk before you run. But again, because of the competitive landscape, we do believe that business will grow regardless of whether or not the hotel industry grows because we think we've got a really good offering there.
spk03: And we've proven it. Yeah, this is Eric. One thing I'll add is we've talked a little bit about the growth of in March, and Jeremy's mentioning some of the pipeline growth. One of the interesting things that we're seeing, we've talked to you guys about virtual meetings and then potentially having hybrid meetings where folks are getting in person and then having a hybrid component, but one thing that we've started now seeing is that as groups come back, which they really want to do in-person meetings, the show size is actually larger for JSAB in many of these cases than it otherwise would have been because as a group of 100 comes back, they're actually renting more space because they want to practice social distancing, which leads to more speakers, more screens, more projectors. And so the show cost actually in the short term might be higher than it was prior. So there are opportunities for us to catch back up to those pre-COVID levels, you know, by increasing our per show costs. for expanded offerings, both hybrid and then additional space, additional needs, because of the social distancing.
spk05: Yeah, and one thing I'll add to, Brian, just to give you a little bit more clarity, because when we went through, we restructured that loan, and I think it was a great restructuring, by the way, by the team, but we really went through a lot of our own diligence, and we went through to understand even our per-group size and our revenue per per group, we were surprised that the bread and butter of JSAV is not your big event. They certainly have the ability to do that. They do it really well. But at our hotel or hospitality segment, it's a lot of the small board meetings, small groups, and you're talking projectors, you're talking just rentals for screens and set up. And so that, I think, is actually a great thing for us because the small meetings are going to come back a lot more quickly than the larger groups. But we were surprised to see that our bread and butter is actually much smaller on a per group basis than what we would have thought.
spk04: Great. Thanks. That's all for me.
spk06: That concludes our Q&A session. This also concludes our call. Thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.
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