Chatham Lodging Trust

Greetings. Welcome to the Chatham Lodging Trust First Quarter 2022 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow a formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. And please note that this conference is being recorded. I will now turn the conference over to Chris Daley, President of DG Public Relations. Thank you. You may begin.

Thank you, John. Good morning, everyone, and welcome to the Chatham Lodging Trust first quarter 2022 results conference call. Please note that many of our comments today are considered forward-looking statements as defined by federal security laws. These statements are subjects to risks and uncertainties, both known and unknown, as described in our most recent Form 10-K and other SEC filings. All information in this call is as of May 4, 2022, unless otherwise noted. and the company undertakes no obligation to update any forward-looking statement to conform the statement to actual results or changes in the company's expectations. You can find copies of our SEC filings and earnings release, which contain reconciliations to non-GAAP financial measures referenced on this call, on our website at chathamlodgingtrust.com. Now, to provide you with some insight into Chatham's 2022 first quarter results, allow me to introduce Jeff Fisher, Chairman, President, and Chief Executive Officer, Dennis Craven, Executive Vice President and Chief Operating Officer, and Jeremy Wagner, Senior Vice President and Chief Financial Officer. Let me turn the session over to Jeff Fisher.

Jeff? Thanks, Chris. I appreciate everyone joining us this morning for our call. As I look at these results, I'm very proud of our teams at Chatham & Island, who did a fantastic job during the pandemic, maximizing revenue and operating profits while minimizing cash burn and executing key corporate transactions. that have enhanced our financial position. In fact, for the eight quarters just ended, we produced positive corporate cash flow before principal amortization and CapEx. As we sit here today, the business traveler is coming back across the country and our five primarily tech-driven hotels in Silicon Valley and Bellevue, which historically comprise 25 to 30% of our EBITDA, are seeing demand accelerate rapidly. As a reminder, these five hotels generated EBITDA of $35 million in 2019, but only a mere $7 million in 2021. This recovery is going to be a major driver behind our outperformance over the foreseeable future. Strategically, we're excited to announce that we're expected to close within the next week on the sale of four hotels, comprising 537 rooms for approximately $80 million and two separate transactions. These older hotels are on average 27 years old and have produced RIPPAR below our portfolio average. In 2019 and 2021, they produced RIPPAR of $96.59, below our 2019 and 2021 portfolio RIPPAR by 28%. and 32% respectively. Additionally, two of the four hotels were set for renovation in the next 12 months, and we believe we could put that money to better use buying assets. Two of the four hotels are going to be converted for multifamily use and would represent our second and third hotels sold over the past two years at a very low cap rate for the purposes of converting to apartment use. The proceeds will be used to pay down most of the borrowings on our $250 million credit facility, which will have only $30 million outstanding when they close. When we exit the waiver period on our credit facility after the second quarter, we will have the full capacity available and we'll have a substantial number of unencumbered assets available to provide flexibility to acquire hotels and address, at the right time, a very manageable hundred and fourteen million dollars of fixed rate debt securities excuse me debt maturities next year we sit here today with substantial dry powder a refined portfolio given the sale of the four hotels and a platform that can grow quickly over the past two years we did a great job putting heads and beds pivoting away from the higher rated business traveler and During the pandemic, since mid-February, we are seeing now a substantial acceleration in business travel. And just like we did on the downside, on the upside, pivoting again and pivoting our sales and revenue management efforts to capture the higher-rated traveler. Our message to our operating team is to push rates. We are in a heightened inflationary environment and have the opportunity to push higher rates. Our opportunity is much better than it was in the years leading into the pandemic when supply growth was significant and there was resistance to any kind of rate growth. Previously, we stated our belief that the business traveler was going to return with a vengeance and never bought into the belief that business travel is permanently impaired. I've lived through a lot of cycles here and heard for many years that how online meetings were going to be the downfall of the business traveler and many other external events that were supposedly going to really cut down business travel. People still like to travel. That's clearly evident in everybody's numbers. They like to meet in person. They like to do business in person. And now we've got two new kinds of travelers to the space. the bleezer or digital nomad traveler, and the people who live away from the office and are being asked to come back to their office regularly. And for those new travelers, I think they're going to be staying for more than one or two nights. That's already evident. And extended stay hotels, the majority of the hotels we own, should be the primary beneficiary of this new added demand. We're becoming more and more confident with respect to this outlook as we see weekday demand really start to accelerate. Weekday occupancy is the best indicator of business travel and it rose significantly through the first four months of the year. Weekday occupancy was 48% in January before jumping to 60% in February, 68% in March, and 72% in April. April weekday and full month occupancy of 73% are both the second highest levels since the start of the pandemic. April 2019 weekday weekend occupancies were both 82%. So given where we are in the recovery of the business traveler, we are already in a very good position. With the sharp uptick in occupancy, ADRs are also advancing quickly. A sign of great things to come, our 2021 April ADR of $161, excuse me, that's 22, is only $4 shy of our 2019 ADR of $165. We've been encouraged by the return of some tech-related group business in Silicon Valley and Bellevue, Washington. Offices have reopened, which will be the impetus to travel both in and out of these markets. In Silicon Valley, Q1-22 witnessed office vacancy decline for the first time in two years, falling to 10.6%. And that decline in vacancy is notable given that 9.5 million square feet of new office product was delivered to the market over the same period. Office developers and owners remain bullish, anticipating the great return for the region's highly profitable and growing economy. tech companies. Revpar at those five hotels has basically been $70 to $75 for the better part of the last year, but April Revpar is up 45% over the first quarter figures. So that business is coming in fast. More great news out of the Valley and Bellevue. We can confirm that later this month, tech companies such as Meta, Apple, eBay, and T-Mobile are going to be hosting in-person internships this summer. In 2019, as we've said before, this business accounted for over $7 million in revenue. This year, we allocated more rooms for this business, knowing that the return of the international business traveler and long-term consulting business in these markets would be gradual over the course of the year. At this point, We have approximately $15 million in intern revenue on the books for the summer. ADRs are approximately $200 compared to approximately $220 in 2019, so pretty close there. An added benefit is that our operating margin on this business is very high as there's limited room servicing as part of the arrangement. We expect the second half of the year to be especially strong in these markets. and will be an impetus to drive our portfolio growth higher relative to our peers. We're seeing increased demand in many of our other primary business travel-driven markets, such as Washington, D.C., the Northeastern U.S., Dallas, and especially Austin, all posting sizable gains here lately. In Austin, where we acquired two hotels last year, red power was about $115 in the first quarter, And in April, that's jumped to $140. Our two hotels at the domain should be top performers as that market is benefiting from tech company expansions and relocations to the area. I want to quickly point out how things are going at our recently opened Home 2 Suites in Woodland Hills Warner Center. After opening in late January, it's ramping up nicely and latest trends are very encouraging there. April occupancy was over 63%, and ADR was approximately $185. We've seen occupancy exceed 90%, and ADR is in excess of $200 on certain nights already. This area is in the midst of a massive growth spurt. More great news in the market. It was announced about a month ago that the Super Bowl champion Los Angeles Rams, closed on the acquisition of a 38-acre site just a few blocks from our hotel that's going to be turned into a mixed-use development, which will include the team's headquarters, host off-season training activities, as well as other football events during the year and welcome fans all year round. Our hotel, that Home 2 Suites brand, is perfectly positioned for the kind of business and demand that this development should generate. We're real excited about that. As I mentioned on our last call, we're confident in the ultimate recovery and trajectory of that recovery in our portfolio and want to see continued improvement, as we expect we will, in the business traveler, especially in our tech-driven markets before reinstating the dividend. Silicon Valley and Bellevue and other primary business travel markets are rebounding and increases our confidence in generating consistent and distributable cash flow. We've historically targeted paying out 100% of taxable income, and when we look at any potential distribution, of course, we'll carefully analyze our taxable income for the upcoming years while also considering use of taxable deductible NOL carry forwards that came as a result of the pandemic. With that, I'd like to turn it over to Dennis for a little more color.

Thanks, Jeff. Compared to 2019, our monthly rev par improved each month of the first quarter, down 36%, 27%, 22%, and then only down 13% in April. The acceleration is definitely attributable to the return of the business traveler, especially in our tech-driven markets of Silicon Valley and Bellevue, which saw rev par jump approximately 45% compared to the first quarter. Large group and convention business is also coming back to life, And we're seeing healthy gains in our hotels in these downtown markets such as San Diego, Dallas, and San Antonio. Our five highest hotels with absolute rev par in the quarter were our residence in Fort Lauderdale on the Intercoastal Waterway with rev par over $250 on occupancy of 93%, followed by our Hilton Garden Inn Marina Del Rey with rev par of $147. Then our residents in New Rochelle, New York, and then rounded out by two hotels making their first appearance in our top five in some time, which is our residents in San Diego Gaslamp and our Homewood Suites, San Antonio Riverwalk. Again, just seeing the return of convention and group business in those two markets especially. Our top five absolute occupancy hotels in the quarter were the residents in Fort Lauderdale, followed by our residents in New Rochelle, our Homewood Suites in Maitland, And then our residents in Charleston, Somerville, and lastly, our newly acquired residents in Austin at the domain, which is its first time making our top five and all five hotels had occupancy of at least 80% for the entire quarter. Our portfolio did significantly better than the industry. The first quarter occupancy of 60% compared to industry wide occupancy of 56%. And we continue to see an average length of stay much longer than our historical levers levels. At our Residence Inn hotels, our average length of stay was three nights, still well above the two and a half nights pre-pandemic. And at our Homewood Suites hotels, our average length of stay was three and a half nights. Again, pretty meaningfully above our pre-pandemic average of 2.7 nights. For the quarter, total revenue of $55 million was up 75% compared to last year's revenue of $31 million. We were able to generate incremental GOP of $12 million. for flow through of approximately 50% on that total revenue increase. Lots of good trends on the top line, and our bottom line is also trending in the right direction. We fully expect that same store margins will be higher post-pandemic. Our first quarter GOP margins were 38% on RevPAR of $88, 15% below 2019 first quarter margins at 44%, but that was when RevPAR was $33 or 38% higher. March was really the only stable month in the quarter, and our March margins were 44% on RevPAR of $119, the same margin as our first quarter 2019 margins when RevPAR was 11% higher. Our teams have produced great results throughout the worst year in the history of our lodging industry and positive developments for margin expansion moving forward. Despite the impact of Omicron on the first quarter, We were able to generate positive cash flow before CapEx. It's noteworthy because it marks four consecutive quarters of positive corporate cash flow. Despite the pandemic, we produced positive corporate cash flow after debt service and preferred dividends of $22 million over the past four quarters. We generated positive corporate EBITDA each month during the quarter. At the corporate level, we generated adjusted EBITDA of $13.3 million versus about $1 million last year. We generated FFO per share of 7 cents, up 22 cents over the same quarter last year when we had an FFO loss per share of 15 cents. During the first quarter, all but one hotel generated positive GOP, and all but five hotels generated positive hotel EBITDA. Our top five producers of GOP in the quarter were our residents in Gaslamp, followed by our residents in Fort Lauderdale. Third was our recently acquired residents in Austin, and then followed by our residents in Anaheim and then our courtyard downtown Dallas, making its first appearance on the list. Despite opening in late January and not having access to the reservation system until opening, our Home 2, as Jeff talked about, has ramped up very quickly on the top and even the bottom line. In March, the hotel produced GOP margins of 22%, which is particularly impressive when you think about the amount of staff we have in place to handle the ramp-up process. On a per occupied room basis at our comparable hotels, payroll and benefit costs were approximately $36, down approximately 3% from the first quarter of 2019. Comp and breakfast costs were 0.8 million in the quarter, up about 0.4 million or 20 basis points over the same quarter last year, but down approximately 400,000 or 10 basis points compared to the 2019 first quarter. As we talked about before, the brand proposed new standards that reduced some of the offerings and should lead to same store savings. So far, that still seems to be the case on a preoccupied room basis. Breakfast costs were $244 in the 2022 first quarter, which compares to $282 in the 2019 first quarter, a pretty meaningful decrease of approximately 13%. On the CapEx front, the company incurred capital expenditures of $4.1 million, excluding any spending related to the Warner Center development, Our 2022 capital expenditure budget was approximately $23.7 million, but once the sale of four hotels closes, our total budgeted spend will be reduced to approximately $19 million. That includes five renovations at five hotels, our Hampton Inn and Exeter in Portland. Both of those renovations have been complete and came in about $200,000 below their budgeted cost of $4 million. And then later this year in the fourth quarter, we have three hotels scheduled for renovation, which are our residence in Washington, D.C., downtown, our residence in White Plains, New York, and Holtsville, New York. As a reminder, we're hosting in-person meetings at REIT week in early June. So please email me directly if we haven't locked up a time with you yet. I'll turn it over to Jeremy.

Thanks, Dennis. Good morning, everyone. Chatham's Q1 2022 RevPAR of $88 represents a 56% increase versus our Q1 2021 RevPAR of $57, and a 27.2% decline versus our Q1 2019 RevPAR of $146. RevPAR in January and the first half of February was impacted by the Omicron wave, but performance has been strengthening significantly since mid-February. March rev par of $109 was down 21.6% to 2019, and April rev par of $119 was only down 13.4% to 2019. The early stages of the recovery were driven primarily by leisure travel, but in recent weeks we've seen a significant uptick in midweek results, which indicates that business travel is now starting to make a meaningful recovery. We expect performance to continue to improve with decreasing rev par declines relative to 2019 throughout the remainder of 2022, with much of this recovery being driven by improving demand for business travel. We were able to generate a Q1 GOP margin of 38.3% and hotel EBITDA margin of 29.2% despite the January and February impacts of the Omicron variant. GOP margins recovered as revenue improved during the quarter, and in March, Chatham's GOP margin reached 44.4% when REVPAR was $109. Our Q1 2022 hotel EBITDA was $15.9 million, adjusted EBITDA was $13.3 million, and adjusted FFO was $0.07 per share, and cash flow before capital, which represents hotel EBITDA less corporate G&A, cash interest and 2.3 million of principal amortization was positive 2.8 million dollars chatham took a number of steps to strengthen its balance sheet in non-dilutive ways during the pandemic and our balance sheet is now in the best shape it's ever been at march 31st we had 158 million of liquidity between our unrestricted cash balance of 18 million and 140 million of revolving credit facility availability as mentioned earlier we have some pending asset sales which is completed with further enhanced Chatham's liquidity. We have no debt maturing in 2022 and only $114 million of maturities in 2023. While we have more than enough credit facility availability to absorb all of our 2023 CMBS maturities, we're likely to begin refinancing our 2023 debt maturities in the second half of 2022. With our reasonable leverage, solid liquidity, and meaningful free cash flow, we are well positioned to opportunistically pursue attractive investments. In Q1, we completed the development of the $70 million Home 2 Warner Center, which opened on January 24th, and acquired the Hilton Garden in Destin for $31 million on March 8th. These two new high-quality hotels, along with the Residence Inn and TPS Austin, which were acquired last year, will meaningfully enhance Chatham's growth and the quality of our portfolio. We plan to continue enhancing the quality of our portfolio by acquiring new hotels and markets with strong growth, and recycling capital in cases where we believe sale prices are attractive relative to future growth prospects. We are very encouraged by the improving operating trends that we have seen in March and April, especially the recent strength we have seen in business travel, the growth that we expect in Austin and Destin acquisitions, and the Warner Center development to generate, and our ability to pursue additional growth opportunities given our strong balance sheet and significant liquidity. While we're not going to provide guidance at this time, for those of you building your own projections, I want to remind you that Q2 will include a full quarter of interest expense associated with the Home 2 Warner Center and the borrowings used to finance the acquisition of the Hilton Garden in Destin. Based on our debt balance as of March 31st, our cash interest for Q2 should be approximately $7.1 million, with gap interest of approximately $7.5 million, including amortization of financing costs. This concludes my portion of the call. Operator, please open the line for questions.

Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the queue. You may press star 2 if you would like to remove your question from the queue. And for participants using speaker equipment, it may be necessary to pick up your handset before pressing any star keys. One moment, please, while we pull for any questions. Our first question comes from the line of Anthony Powell with Barclays. Please proceed with your question.

Hi, good morning, guys. Good morning. I appreciate all the color on business travel. It's definitely encouraging. I guess looking at leisure travel, have you seen any, I guess, decline in either rate or demand on a year-over-year basis relative to 2021? And what's your, I guess, outlook for that segment as we kind of approach the peak summer time frame?

Yeah, this is Jeff. Hi, Anthony. I think it's fair to say we will be a better judge of that than most folks will be this summer, when especially our Northeastern and New England hotels experience a huge amount of demand there. But I will say that everything particularly weekend and now midweek, our highest ADR hotels are, you know, leisure-related for the most part, whether it's Il Laguno, right? Savannah. Savannah, crazy, crazy winter there, wonderful winter there, great spring there. So I would say leisure demand is still very, very strong, very strong.

Yeah, I think just based on the comments from our operator, Anthony, You know, the Northeast hotels that Jeff just alluded to, Exeter and Portland and Portsmouth, feel pretty good at the moment about this summer.

So no real sign of any kind of, like, consumer weakness relative to inflation or price fatigue. It sounds like things, at least as of now, are not showing that. Is that fair?

Not showing up yet. I think we'll have to wait and see where this economy goes. But, you know, our efforts, especially on the operating side, are just all around maximizing and working the corporate accounts now that they're showing willingness to start traveling again.

Thanks. It may be related. As you get out of the covenant waiver and as you start to buy hotels over the next few quarters, there's a lot of talk about business travel coming back and that being favorable, but most of the acquisitions across the industry have been leisure focused. Austin is a bit of a mix. I'm curious as you seek to grow the portfolio size again? What's kind of the target hotel and how does it shift it over the past few quarters?

You know, we haven't really substantially shifted our focus and we're never afraid of acquiring business related, you know, or driven hotels as evidenced by Austin. I mean, you know, domain, tech driven, all you hear about, you know, the next word, second word after Austin is always tech. And there we were in Silicon Valley with no business, and we bought these hotels. But as you said, there's some diversified demand generators there as well, and we'll certainly continue to look for markets like that that have some other sources of business. And one thing that we tried not to do is just completely shift our strategy in terms of the kind of hotels that we believe in because we've experienced, for me, almost 40 years of doing this, very, very good results in the kind of business and, frankly, the kind of brands and particularly extended stay. And that's not a new idea on our part either, as you well know, even though it's being talked about as, you know, the best part of the lodging business for the most part. especially during the pandemic. So I think that we feel good about our focus and the brands that we do look to acquire.

Okay, thanks.

Appreciate it. Our next question comes from the line of Ari Klein with BMO Capital Markets. Please proceed with your question.

Thanks, and good morning. Maybe just on Silicon Valley, it looks like it's on the path to recovery this summer with interns coming back. how are you thinking about the occupancy recovery more broadly through the portfolio and through the remainder of the year uh you know given that what's been lagging seems to be recovering pretty strongly here how close can we get in 2019 occupancies over i guess the second third quarter hey ari good morning this is dennis listen i think we're going to get pretty pretty close to 2019 levels from an occupancy perspective in the second half of the year one thing that

You know, once, you know, this intern business, you know, we started talking to them earlier this year, and that's kind of morphed over the last 120 days and the expansion of the intern programs. Now we're really seeing some robust requests for rooms outside of the intern business, you know, even starting, you know, this month with some long-term corporate business, i.e., you know, two to four weeks of it, and, you know, we've, You know, the relationships and the goodwill that we've built, I think, over the last, you know, two-plus years with some of our key corporate clients, they're talking about and wanting to secure rooms for the fall, again, for kind of some more long-term product development type business as well. So, you know, I think we're pretty encouraged at the moment of what that second half of the year looks like from an occupancy perspective. And just from a rate perspective, Ari, I think it's important to note that you know, when we first were negotiating the intern rates for this summer, as Jeff talked about, they're about 20 bucks or 10% below 2019. But since we kind of allocated the first chunk of rooms to the intern program and those companies and other companies are coming back for additional demand, we're, you know, those rooms are getting priced, you know, substantially higher. And, you know, I think that bodes well for, you know, post-intern business into the fall and for the rest of the year. So, I think not only from an occupancy perspective, but a rate perspective, things are looking pretty good out there.

And just following up on that, are those rebooking rates higher than the original rates or higher than 2019? Yeah, absolutely. Higher than the original and higher than 2019. Got it. And then just on the supply side, it seems like the environment is is improving with, you know, lower supply outlets. But if you can just talk across portfolio, you know, what you're seeing there.

Yeah, Ari, yeah, I think from a supply perspective, you know, we're set up, I think, pretty well. We absorbed a tremendous amount of supply leading into the pandemic. I think one of every select service brand was in one of our, were introduced, if not more than one, in certain of our key markets. So, you know, I think as we're in this period post-pandemic, very little new supply in those markets. I think everything, if you look at kind of what's being announced and new developments that are out there, those are in, you know, markets that generally we're not in. So we're, you know, I think we're pretty confident that, you know, we've, you know, I think we have a pretty good runway here.

Appreciate the call. Thanks.

Our next question comes from the line of Kyle Menges with B Riley Securities. Please proceed with your question.

Good morning. This is Kyle. I'm for Brian. Hey, Kyle. I was curious you mentioned the four hotels that you have under agreement to sell. Those were among the 15 lowest performing hotels in the portfolio. I'm curious if you're exploring opportunities to sell the other 11.

Well, I mean, listen, yeah, we're not going to sell all the other 11, but I think it's really just a highlight of, You know, those assets have really been kind of, you know, just, uh, steady producers of rev par, but certainly nothing from a major, you know, growth perspective or anything like that. So, you know, we're going to continue and two of those, as Jeff mentioned in his prepared comments are being converted to multifamily, uh, you know, within, you know, I think a short timeframe. So, you know, we'll just continue to be opportunistic, uh, with recycling capital, which is what we've been doing. But listen, I think even though, you know, those four are definitely below our portfolio averages, you know, we're not just going to, you know, up and mass sell any of our lower rep bar if we believe that those assets have some nice room for growth from here on.

Okay. Thanks for that, Colin. And then how do you feel like you're situated from a staffing perspective, especially in Silicon Valley as occupancy is expected to ramp through 2022? Yeah.

Yeah, good question. And I think, you know, one of the benefits, and again, I think in Jeff's prepared remarks that he talked about, the beauty of that intern business is we're going to be running, you know, 90% to 100% occupancy in those five hotels. And with that intern program, you know, we might be cleaning the rooms once a week, you know, I think for the most part, at least, you know, no more than once a week. So even in a hotel like that and even in a market like that, where hotels are hiring a lot of people, um, because hotel, because their occupancies are starting to ramp up, we're not going to need the same level of housekeeping, uh, services because the frequency of cleaning is going to be so little. So, uh, that bodes well to be, you know, really high margin business for the summer. So from a staffing perspective, um, we're generally, you know, I think in a pretty good position, uh, across the portfolio, especially in those five markets. for five hotels.

Okay, thanks. That's all from me. Our next question comes from the line of Tyler Bottery with Oppenheimer. Please proceed with your question.

Hey, good morning. Thanks for taking my questions. A few follow-ups for me here. In terms of the asset sales, did you run a process for these? Can you also talk about pricing, you know, valuations for these properties now versus potentially pre-COVID? And then also, I'm not sure if you can say how much EBITDA they contributed to 2019 as well.

Yeah, Tyler, I mean, I think we'll talk about kind of pricing and everything, but, you know, the four hotels, I think, generated $2.2 million of EBITDA in 2019. In 2021. Yeah, I'm sorry. In 2021, you know, the recently acquired Destin Hotel actually has had 2021 hotel EBITDA of 2.3 million. So that one hotel is, you know, producing more than the four that are out. The pricing we think is, you know, attractive. It was a 6% cap rate on 2019 NOI and a 2% cap rate on 2021 NOI. So it was, you know, those assets were part of a process. That we've been working on and we I think we've talked publicly about here for a couple of quarters that we were going to look to opportunistically sell some assets And again, I think one of the keys is that you know again two of those four hotels are ultimately going to be converted from multi-family use which Obviously from a multi-family buyer. They're able to get a great product At a reasonable cap rate, but it's a very attractive cap rate for us Okay great

In terms of trends in the business here, is the base case that May is better than April, June is better than May, July is better than June, et cetera, and we just continue to progress going forward? Do you think it plays out like that sequentially? Is that a reasonable expectation here?

Yes, it should, yeah. It should. And that also reverts back to what I would call normal seasonality, you know, if you think about our portfolio or the hotel business. So, you know, you'll get that kind of run up as you always did in the past. And then once October is done, you know, then you start into, uh, lower seasonal months.

Okay. And then just last in terms of the dividend, you know, I know you want to see continued improvement in business travel. see the return in the tech markets. I mean, can you give any more specific color in terms of trigger points that you're looking for? I mean, is there a, you know, rev par level perhaps, or, you know, comparing, you know, EBITDA versus 2019, just trying to get a sense of perhaps a benchmark, you know, that you might look at to start thinking more seriously about reinstating the dividend.

It's really all of those things. There's no one thing. Taxable income drives the board's decision, obviously, but I think it's considering every metric that you can in terms of where the cash flow is and where it's going.

Okay. And then just the last one, I wanted to put a finer point on the corporate travel commentary. Are you seeing any price sensitivity from that guest as they're starting to come back. And, you know, traditionally when you look at leisure versus corporate, it's usually the corporate side of things. That's not that price sensitive, but you know, over the past, you know, six plus months, perhaps it's the leisure that was less price sensitive. So, so as, as corporate starts to come back and is your expectation, that's you know, the pricing power should be similar to what we've seen at some of these leisure focused hotels where you can, I'm sure in some circumstances, essentially charge whatever you want and guests are still coming.

Well, I wouldn't say we can charge whatever we want, but I will say that the business traveler, at least so far, and as we've kind of looked over the next four or five months, is less averse to pricing as they were pre-pandemic. I think most travelers have been conditioned over the last year and a half, especially, for increasing rates. We have certainly an inflationary environment where everybody's paying more for everything that they're buying on a daily basis. So I think, again, there's less aversion to what debt pricing is at the moment. And I think as we talked about in our prepared comments, you know, our message really since last year has been push rate, hold rate. You know, the travelers are going to be there and let's capture as much as we can as you know, while we're in kind of this environment.

Okay, great. That's all for me. Thank you for all the detail.

Thanks, Tyler. Thank you.

Thank you. At this time, we have reached the end of the question and answer session, and I will now turn the call back over to Jeff Fisher for any closing remarks.

We appreciate it. Thanks, everybody, for being on the call. And, again, we'll continue to do what we're doing and look forward to our next call. with even better results as we go forward. Thank you.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation and have a great day.