Pandox AB (publ)

Thank you very much. Good morning and welcome everyone to this presentation of Pandoc's Interim Report for the second quarter, 2024. I'm here together with Liannu, our CEO, and Anneli Lindblom, our CFO. And with us today, we also have Alex Robinson, Director, Industry Partners at STR. And STR is a leading independent research firm focused on the hotel market. And Alex is here to share STR's view on the market. And the views expressed by STR are completely separate from Pandox, and the presentation is offered only as a service to Pandox stakeholders. And also, please note that Alex presentation will be held after we have completed our formal earnings presentation, including the Q&A. Before we let Alex in, Lia and Anne-Libre present a business update with financial highlights for the second quarter 2024, followed by the Q&A session. So with that, I hand over to Lea, the CEO of Pandocs.

Thank you, Anders. And good morning and welcome, everyone. I would like to start this presentation with a very quick recap of some key investment highlights on Pandocs. We are active in travel and tourism, a global and highly dynamic industry with strong structural growth drivers. Tourism is one of the largest industries in the world, accounting for almost 10% of global GDP and a substantial share of new jobs created. We only invest in hotel properties. you you And we work with all operational models and our focus on creating value across the whole value chain. We have revenue-based leases with strong skilled operators. This gives us upside and common goals with our operators. It also gives us inflation protection and inflationary costs are performed by the operator. This also enables Pandocs to have a strong positive yield gap of more than 200 basis points, relatively independent of the interest rate environment. We have a high quality project pipeline, which we expect will accelerate our organic earnings

and value growth in 2024 to 2026 and beyond. And we have ambitious ESG targets, including a substantial climate transition program with high ROI. Our property portfolio has an average valuation yield of 6.26% with long leases and a vault of 14.6 years. And finally, we have only bank financing with strong and positive lender relationship and low refinancing risk. Our business is to own, improve, and lease hotel properties to strong hotel operators under long-term revenue-based leases. We do this through four principal value activities. It's property management, property development,

portfolio optimization, and sustainability. We are an active and engaged owner based on deep hotel expertise. We have a strong and well-diversed hotel property portfolio. 157 hotel properties with approximately 35,000 rooms in 11 countries and 90 cities. And with a property market value of 71 billion kroner with an average yield of 6.26%. We are divided into two mutually supportive and reinforcing business segments. It's LeaseSys and it's our own operations. In leases, where we own and lease out our hotel properties, it stands for 84% of our property market value. And in our own operations, we transform and run hotels in the properties we own, And this makes up for some 16% of the property value. The focus of our portfolio is upper mid-market hotels, with mostly domestic demand, which is the back of the hotel market, regardless of which phase in the hotel market cycle is in. We also have one of the strongest networks of brands and partners in the hotel property industry. This ensures efficient operations and revenue management, which maximize cash flow and property value and a continuous flow of business opportunities. And also, a relatively large part of the investment in leases is shared with a tenant, which lowers our risk. We had a positive and seasonally strong hotel market in the second quarter. The event calendar was packed. Leisure travel was active. And business demand was stable. This translated into good operational performance for us.

Like for like, both revenue and total net operating income increased by 6%. and cash earnings increased by more than 10% and growth in EFRA NRV was positive. Our average outgoing interest on debt decreased to 4.1% in the second quarter, which further supported our positive yield spread, which is above 200 basis points. So our financial position is strong and we are well positioned to act on market opportunities. Here is the REVPAR development level for our business segment leases compared with 2023. The numbers are on a comparable basis and of fixed currency. In the second quarter, REVPAR increased by approximately 3% like for like. For the portfolio as a whole, increased average prices explains most of the uplift.

Here we have a breakdown of the performance for a selection of countries, regions, and cities versus 2023. We show average daily rate on the vertical axis and occupancy on the horizontal axis. Thus, Oregon is the point corresponding for both ADR and occupancy. In the boxes, we indicate how much higher or lower the rev bar is compared with the corresponding period, 2023. In the second quarter, the hotel market, with some variations, developed positively. Rev far increased in most markets, driven by increased price, while occupancy was a little bit more dispersed. In terms of rev far, the greatest to place in Norway's regional and capital cities in the Nordics, such as Stockholm, Copenhagen, and Helsinki, which benefited from an active event calendar. And the improvement in Helsinki was particularly welcome. Alex Robison from FDR will talk more about the underlying trends in the European hotel market later in this call. We have an active investment pipeline and are on track to add an additional 300 million in net operating profit for the year 2026 on annual basis. Hotel Commandos is already completed and in full swing. Citibox Brussels opens 14th of July, and ScandiGo Freedom's Brown opens 8th of October. These two will gradually start to contribute during the second half of this year. And with that, I hand over to Anneli Lindahl.

Thank you, Leah. So good morning, everyone. We're happy to report a profitable growth in the second quarter, which is a seasonally strong quarter, and this year filled with many events. We saw good performance in both business segments. For the group, like-for-like growth was positive, both in revenue with 6% and in net operating income with 6%, supported by a positive and active hotel market. Own operations continued to perform well in the second quarter, supported by a strong hotel market in Brussels and a positive boost from the European Championship in football, especially for our hotels in Berlin and in Dortmund.

We also saw positive effects on the renovation of the position of Hotel Berlin in Berlin. For lack of doubt, in revenue, it was 10%. And in net operating income, it was 20%. Cash earnings increased by 10% in the quarter. And profit before change in value increased by 16%. Current tax amounted to minus 104 million, and the efficient tax rate was 7.4%. On this slide, we show the change in the main valuation parameters for the total property portfolio year to date. And remember that according to IFRS, unrealized changes in value for our operating properties are only reported for information purpose included in the EFRA NRV calculation. In the second quarter, 2024, the unrealized changes in value were positive 423 million. This is explained by increased cash flow which outweighed a marginal increase in yields. And as you know, we have the main part of our hotel's properties outside Sweden, and they're nominated in foreign currency, so we did have a positive effect of currency this quarter. In the quarter, we completed the divestment of our last hotel in Canada. At the end of the period, the average valuation yield for investment properties was 6.13%, and for operating properties, it was 6.90%. and of average for the total portfolio, 6.26%. Here we have the average yield, the average interest on that, and the share quarterly. Despite higher yields and higher market interest rates, the MRV per share has increased compared with 2019, and we have a tangible and positive yield spread of over 200 basic points.

In the second quarter, Growth in EFRA NRV was positive, measured on an annual basis adjusted for paid dividends. Our LTV at the end of the quarter amounted to 46.2%, which puts us in the lower end of our policy range. The ICR on a rolling 12-month basis was resilient 2.6 times. Cash and credit facilities amounted to 4.1 billion. And on top of that, we have still uncovered assets of some 800 million as an untapped reserve. And the financing climate, it has improved further in the last couple of months.

In the quarter, we refinanced loans of $3.5 billion. And generally, we can now refinance at lower credit margins together with a slightly lower base rate. We continue to increase the share of sustainable And at the end of quarter, we have some 5.4 billion that were sustainability. Looking ahead, we have 7.4 billion on debt maturing within one year, up with 60% in the fourth quarter. And as you know, we have strong relations with our banks, and discussions on future refinancing are ongoing and positive. At the moment, 71% of the net debt is hedged, which means that the effect For the moment, the market states are still relatively low. And with that, I will have to go back to Leah for some more final remarks. Thank you, Anneli. Our message from the last two interim reports that we expect some revenue growth in the hotel market in 2024 is still valid, and it's well supported by the developments in the first half of this year. We are currently in a seasonally strongly leisure period with high demand from domestic and regional leisure travel. The event calendar remains well-built and with the increased international inbound travel to Europe. For example, in May, London Heathrow reported its strongest 12-month period ever, and there is still good potential for increased passenger volume during the summer. All in all, we remain positive and excited. good hotel demand also for the third quarter. And we now move over to the Q&A of Friday. We are now ready for questions. And please do not forget to hand the call back

If you wish to ask a question, please dial pound key 5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key 6 on your telephone keypad. The next question comes from Marcus Henriksen from ABG Sundal Collier. Please go ahead.

Thank you very much. Good morning, everyone. Two questions from me. First off, a bit regarding acquisitions. Could you highlight a bit what you're seeing in your different markets? In what type of markets are you seeing improved activity? And then a bit of reasoning on where you're comfortable in terms of net debt to EBITDA and loan to value.

Thank you. Yes, hello, hi. When it comes to acquisitions, we are... the transaction market is well back. A lot of more transactions are out and possible than it was just a year ago. And when it's the same answer we always give, we want to, we approach we're looking at where we already are, but also neighboring markets. But the most liquid and the best market is UK, Ireland, but of course also the Nordic. I'd love to do something in Germany, but it's typically a little bit later on. So Ireland, maybe the first one where you see the most large numbers of transactions. On the second question regarding LTV, we have 46.2%. This is is in the lower range, over 45% to 60%. And now when we see flattening out and improving, we are comfortable by being around obviously in our range. but we have never been basically south of 50. Hopefully with some acquisitions we can improve or increase a little bit from the 46th, but I would expect us to be in the range between where we are today and up to 50 perhaps. Thank you, very clear. Then a bit on new hotel supply. If you could go through a little bit in your different markets, where are you seeing the most demand? favorable demand-supply situation relative to the current performance in respective markets, and then relative to, say, one to two years from now, where you're seeing a potential could last or change. Thank you. What we have, like we said before, what was already planned before the pandemic has been put in place, and where we have seen a lot of new demands come, new

It's especially Copenhagen, it's Helsinki, it's Gothenburg, which this year has been a lot of new capacity coming in. Not so much are coming sort of newly planned. So we expect end of 2024, 2025, 2026 to have a very moderate increase of new capacity. But of course, as always, this will eventually be be coming back uh but otherwise these are the these are where we're seeing the most largest capital then there's of course specific cities etc but copenhagen helsinki copen uh gothenburg thank you and then could you please remind us when when we see this kind of uh

strong performance.

If you go back historically, how quick has the market been able to see that and new supply coming onto the market, say from a plan and then construction and then entering the market? When new capacity comes in, it typically takes maybe up to one and a half to two years before it's actually absorbed in the market. Of course, when a new capacity comes in, the planning phase for a new hotel would normally take anything between two to four years. So you would expect something to start coming in, but it's quite a long wait. process of actually putting a hotel in place to build it and then also establish a new market for it. So we do expect there is a window where there is much less capacity coming in now, especially in 2024, 2025 and beginning of 2026. Very clear. Thank you. Thank you. The next question comes from Frederick CYON from Carnegie. Please go ahead. With the European Championships in Germany in the second quarter, you from the beginning. Maybe you can restate your question, Fredrik. Of course. Can you hear me now? Yes. Perfect. Obviously, the European champions had a positive effect on the German operations in the second quarter. Can you elaborate on that? on what kind of additional revenue that's generated in the second quarter? Absolutely. When we look at, we'll try to estimate what the The effect of the European Championship has been in June and also July.

If you look at June month separately, the German market's red bar increased by 19% and we expect approximately 75% of that coming from the European Championship. because there was also more events and conferences in that month. So there's like a double dip, but a double hill or whatever we say it. So that means that the effect on the quarter, we estimate to be somewhere between five to six percent. And on a yearly basis, it's two, three percent, which is quite remarkable, I would say. Of course, individual cities, there could be anything from 25 to 80% increase, and we are happy to, as you know, we have hotels in both Berlin and Dortmund, which have been the sort of biggest cities where a lot of matches have been. In July, we do expect that, of course, there will be a continuing effect, but as there have been fewer matches, we perhaps estimate that this will be half the effect of

what we saw in June. Month to date, we have a for the two weeks, about 15% increase in revenue in the German market. So very positive, all in all. Definitely. Thank you. a lot. And then moving over to RedPog guidance, you said obviously that there will be some growth in 2024. I believe you have a good knowledge of the event calendar next. Do you think it's reasonable to assume that that we will have REBPAR growth despite all the terrible moments we've had in 2024? Yes, I do believe so. We also will have REBPAR growth, absolutely. With the event calendar being full this year, of course, there are a lot of events also in next year. So we have a remarkably strong Q2. It will be maybe perhaps different. the Q2 next year in a significant amount, but there will be real progress. And after that, there's less capacity coming in. Also, we have our projects coming to market. So all markets are growing, and that's why our projects are coming in. Now you're breaking up again. Sorry, we didn't get that. Okay, sorry. Can you hear me now? Yes. Okay, perfect. So moving over to cost of depth, the client's cost on what the quarter on quarter, and you do have quite a lot of debt maturing within a year. Do you think your cost of debt has peaked? Sorry, does our cost of debt have peaked? Well, yes, and as we write in the report, And the credit margins are coming down in all the refinancing. And also, of course, we take the opportunity to re-refinance where it's possible. So the credit margins are both from our old credit.

pandemic times, but also sort of in a different, more worrying environment. So I do believe we are, of course, we have more than 70% budget ahead, so we'll take a little bit more time, but we are refinancing continuously. And it definitely will come down.

My final question relates to acquisitions. There has been quite a few deals in the European hotel market yet to date. Has the price levels been too elevated for your taste or is it more related to what kind of assets and portfolios has been out there?

We are looking more at different, both single assets and small portfolios than ever. Typically these portfolios and assets take a little bit of time to put in place. There are

quite a few interesting things out there, but there's also, of course, a big chunk which hasn't been moved to a turnover for a long time. So there's a lot of growth, especially fixed leases, which we're not really our cap of the day. But there are definitely interesting things out there, both price-wise and market-wise. Thank you, and thank you for the bad line from central Stockholm. The next question comes from Albin Sandberg from Kepler. Please go ahead. Yes, hi there. So a couple of questions, please. If we take, I think you said, basically repeating the hotel market outlook for this year. And just looking at Q2 isolate that. How did that play out versus your expectations when you ended Q1? Well, we were not least disappointed, if I may say so. a plan slightly better I would assume because you never know of course and of course there's always worrying about everything from inflation interest rates, recessions and God knows what but very very very positive from Germany. The Germany effect in April, June was pretty flat, but the June jumped up fantastic all going along and if it's one word to compare you know the more that you are outperforming the market or in line with the market or maybe even underperforming the market?

When it comes to prices?

Yeah, with the REVPAR in general.

Well, so far, a lot of the red power growth on the most extreme upside has been the south of Europe. And as you know, we don't have so much presence in Europe. But you could say that we have more potential as Germany is coming in. I mean, they had a strong performance in Belgium, et cetera, this quarter. But we are, country by country, I think we are in line with the performance. on a total Europe level, then, of course, we don't have the presence in the south of Europe. And especially Italy, Spain, Portugal has been heading the back.

Yeah. I was thinking more on the markets where it actually presents themselves. So I think it's... Oh, absolutely.

Yeah. Absolutely.

Absolutely. Yes, absolutely. Okay, good. And then on your ongoing developments where you indicate 300 million of NY increase, and I guess two of them are completed, how much of those 300 are already in the numbers, I think, too. Well, basically nothing yet. We have four months which come into place in, I think, the first of March, and the So basically there is very little yet which have come in. Okay, great. Of course, especially the stock market is changing quite rapidly direction. And just thinking about your commenting about your risk financing and so on. And of course, there's been a lot of focus on that. I guess a very supportive start to the overall refinancing opportunity. It's not only for you, but for your peers. But you still spend some time commenting on that, and I guess being a property company with a lot of debt, it's not... It's not unusual in that sense, but I guess when we look at the upcoming refinancing now over this year and maybe next, You indicated that you were expecting a positive outcome of that, not a negative, I guess. Absolutely. Yeah. But do you think that this kind of... When do... we get into some kind of a steady state where we're financing or we're still in a special stage or in a stage where you sort of, I don't know, maybe adjust your debt portfolio for a longer credit material or anything like that. I guess we will.

always have this comment when you report going forward, or is it still something special you want to highlight to us?

I think we are, as we are sort of refinancing our portfolio, we indicated on the last call that new refinancings are around 40 basis points lower. If anything, I think maybe the lowering of the credit smarts are even higher than that. So Pre-pandemic, the average margin was around 150 or so. Maybe it's peaked about mid-230, 240. Now we are heading back hopefully below 2% again. So whether we'll go back to 150 for the whole portfolio, that will probably take a little bit longer time, but I'm sure we'll actually get there as well.

Okay. Okay, thank you very much. All for me. Thank you.

The next question comes from Edward from Green Street. Please go ahead. One question for me in terms of, so it sounds like you're going to be a grower, so either acquisitions or more development. I'm curious to know what sort of yield on cost you'd be targeting. for sort of new developments, either new ground-up developments or value-added tap opportunities? Well, we only do value-add. We don't do sort of newly built. So the acquisition, either we develop in our own existing portfolio or we acquire properties where there is possibility to continue to do some development and value creation. Which would be sort of And would be in line with what we have seen before. And with that average year long. So if you elaborate on the average that you've seen before. the average when it comes to our own when it comes to our own investments I mean in our existing portfolio typically we would have a return around maybe 10 to 15%, depending on what kind of development it is. When it comes to acquisitions, then of course it depends on which country you would do that in, but hopefully we find something the last acquisitions we did for nine ten percent of course i would do hundreds of those but typically we do find ways of getting very healthy returns as we buy something and then and we do continuous investments and develop the properties, adding even more value. Understood. Maybe another quick one.

Are you looking at also other geographies that you haven't invested in? I'm thinking, you know, Southern Europe has been pretty active in terms of acquisitions and deals. Is that an area you could expand in in the future as well?

Well, we would typically do where we already are. And of course, neighboring countries as well. I mean, we are small. There's a lot of opportunities already where we are. There's large, huge markets. We've been looking at Spain. We've been looking at some different markets as well. It's typically sometimes been too expensive. We'll be a little bit too late in that. But we would never say never. But there is more than enough to do as well also in the regions where we are, especially UK, Ireland, Nordics, Germany, Benelux, etc.

Perfect. Thank you.

Thank you.

There are no more questions at this time, so I hand the conference back to the speakers for the next part of the presentation.

I'd like to hand over to our guest speaker, Alex Robinson, for the hotel market update. And a reminder once again that Alex's presentation is totally separate and independent from Pandox. And it is arranged as a service to Pandox stakeholders. So with that, please go ahead, Alex. Good morning, everyone. Thank you for the welcome. If we commence with our first slide, we can see is global demand for hotels, number of rooms sold. And the good news is, since Thomas last presented to you on the April call, is that trend of selling more rooms as a global industry is continuing now. for the last 17 months. If we then go to the next slide, please, what we can see is there has indeed been a slowdown in terms of percentage year-on-year change for demand. Notably, we saw contraction in February and March. So positive news, we've seen gains back in April and May. And a big driver of that, which we'll see if you head to the next slide, please, is the US. which did have declines towards the end of last year, starting this year. But as we can see in both April and May, although it was muted supply growth of less than 1%, demand easily outstripped that. generating overall growth. On to the next slide, please. What we can see is the picture of global occupancy. Much like Thomas presented in April, picture, if you take into account the likes of mainland China, northern Africa, South America, where we do see declines.

And if we look at Europe, we do see commendable growth year-to-date of 2% through until May, full occupancy of 66%. Still slightly off the occupancies of 2019, but what I think is important to remember here is that since January of 2020, we had almost as many as 3,000 hotels approaching 320,000 new rooms open across Europe. So even while the industry did stand still for a period during those lockdowns, constructions did move forward, and we are indeed selling into a bigger pool of rooms, which I think makes the recovery and growth that we've seen a result. even more impressive. On to the next slide, we'll start to take a look at occupancy, average daily rate and revenue for available room, percentage change for Europe. Again, we can see February and March, particularly in April with a shift in Easter, slower gains, but then back in May with more commendable growth of 6%.

And overall, while it may appear to be a deceleration, I think it's important to contextualize that those large double-digit percentage growth that we saw during the recovery period are now making way for more substantial growth. single-digit range of growth that we would have expected pre-pandemic and would have been present in normal market trading. On to the next slide, and what we can see is that it's a positive picture of growth far as occupancy on books. When we last provided an update in April, we can see that weekend business was about even with where it stood last year. More good news that we can see as of July 1st when this data was captured. that actually we can stay ahead. And one of the big questions that we get from investors is on many calls, presentations, can this European summer be as good as it was last? And the initial data is very positive. that we've been keen to highlight this year, which you can see again in the middle portion of the slide for weekday, is that weekday occupancy on the books is also ahead, and it is fostering growth, which you see on the next slide, please. What we'll then see is ADR by stage pattern. You've got your shoulder, Thursday, Sunday, Thursday for the glass of wine, midweek, the laptop, not representing a more corporate stay pattern. And then your golf bag for your leisure. And if we look at 2022 briefly, no surprises. led us out in early stages of recovery. 2023, that got closed. We started to see midweek and shoulder. Get back and be on the map. And now into 2021. you can see that closing.

And what's interesting is if you look at many cities, particularly across Europe, it is actually that midweek stay pattern, both in occupancy and rate, that's driving that growth. So the next slide, please. What we'll then see is a comparison between European revenue per available room and U.S. per available room indexed to 2019. And we talk about the importance of that summer, that packed events calendar, the Euros taking place in Germany, the Olympics upcoming in Paris. And you can see there in 2023, that was the inflection point for when European performance surged ahead. And you now cast your eye to the end of the axis in May, and you can see that is taking into effect again. And that's also bolstered by, you can see the small graph there to the bottom right. Within there, one percentage point more occupancy than we did have same time last year in July and August, and also for September and October.

So it does make for a very positive reading in general. So the next slide, please, what we see is talking about that regional picture, and you touched on this in some of the questions and commentary earlier. UK and Ireland fully recovered relative to 2019. Again, I think very impressive when you consider old and new roads, but also enter that market in the meantime. Southern Europe also performing well. And good news also for CEE and the dark countries where, yes, they are towards the end of the spectrum. But if you look at the very bottom there for year-over-year percentage change, you can see making gains. So not standing still, but actually pushing ahead to close that gap. So the next slide, please, we'll This is really one of the questions answered earlier around performance in the Mediterranean. You talk about Italy and France and Spain, which have had really strong performance in the convergence of international travel. strong luxury offering, and all catered towards leisure. Now, withstanding the rest of Europe, while not perhaps seeing those same levels of great growth that we're seeing across the Mediterranean, also strong levels relative to 2020. And if you cast dry to the bottom again, in year-over-year percentage change, you can see it's still growing even on top of that already impressive growth. So the next slide, please. And now we pan out for a bird's eye view.

view of capital in key cities across Europe. And it's not quite as bright viewing as Thomas shared with you in April.

It is a slight bit of softening in terms of occupancy growth. And you do start to see some of those markets, Dublin, for example, where supply growth is outstripping that of demand, starting to see which we'll touch on in more detail, a bit of displacement in the lead-up to the Olympics. But overall, very small declines, if any.

and not quite the same level of growth, but still growth overall. And to the next slide, please, when you look at the year-to-date figures for average daily rate, you can see those contractions in Dublin again, which we highlighted where supply is outstripping that of demand. If you cast your eye to Warsaw, for example, you'll be able to see that that market's had record years year after year and does have more supply coming into it. So ADR growth more muted there, and then to the Baltic states where you do have some demand challenges or in the likes of Vilnius comping over an active event calendar last year. So, looking south across the Mediterranean, you can see those encouraging figures of rate growth overall. On to the next slide, and now having a cross-section of performance by class, luxury, all the way through to economy. Again, we see that all classes are ahead.

at 2019, but we're still seeing the continuation of the theme, which indeed is a global theme, not just a European one, where luxury hotels are the one bookend, economy hotels are the other, are the strongest in terms of performance, and mid-scales slightly less in terms of gains versus 2019. And on the next slide, what could we infer overall versus business on the books? of July 1st for each respective hotel class from July until September. What level of business on the books do we have versus the same period of 2023? You can see again it is economy and luxury hotels with is a large number of business on the books relative to the same period, but good news also for all classes that while they may not be performing at the same level, they do indeed have more positive occupancy on the books than they did for versus last year. On to the next slide, and this is one I thought to include, and Thomas could include again in April. But I think really important to highlight here what we're seeing in terms of occupancy week over week in 23 versus 17, highlighting no change in the data. There is no AI applied. We didn't add any intelligence to that. It's simply those occupancy week over week percentage points difference you can learn a great deal from the past and we're very much perhaps creatures of habit and proof being if we go to to the next slide, what we can see for the first half of 2024, all the way to April and May, slightly less of a correlation to the shift in Easter, but again, following those same week-over-week or declines relative overalls.

So we can learn a great deal of performance when looking at the past and taking that forward into the future. And on to the next slide, please, and I think apt to cover Germany, as Thomas did in April, but also in light of the large events calendar, not just that of Euros, but many other Weltmesse and large stage concerts. You can see occupancy there pushing closer and closer to 2019, April and May, a bit of a gap, but now as we head into all of the fixtures for the Euros and events throughout the summer, you can see June and July pushing ever so close. And to the next slide, please, you can really see the impact of the football there that first weekend of fixtures through into July really steaming ahead in terms of rate and starting to push onwards. And on to the following slide, what we'll see, and I thought it's an interesting one to highlight. So here we have Paris as of the beginning of July.

No surprise there. Huge amount of compression over the days during the Olympics, but also what's interesting, and this is a trend that we saw in London, also in Rio and Beijing, other Olympic coast cities where as rates increase and as As crowds increase, there is indeed a bit of displacement in the lead-up to an apparent period following where those who may have gone to Paris, whether they're put off by the race or indeed the larger crowds, you don't quite see the same occupancy in those periods. However, it is still great news for host cities and hoteliers where rate growth during that period is so substantial. You'll expect to see very significant rev part growth over that period. in Paris looks to be no exception. On to the next slide, touching briefly on our European forecast there. One caveat that we do not forecast for Europe on this continent is the level but a concentration of the cities you can see highlighted below there. And almost equal parts occupancy and rate pushing red parts growth this year, if not more on the rate side, which is not surprising when you can see the compression caused by many major events and the rates that hoteliers are able to achieve. Over that period, however, into 2025 and 2026, our analysts are saying that rate growth while it's been so great over recent years is 10%. somewhat an occupancy taking over as the driver of growth for those subsequent years. And our next and final slide just is a big thank you for hosting us this morning. It's been a pleasure to join the group and provide some insight across Europe. We're wishing you a great weekend and some summer holidays if you do have any coming up.

Thank you, Alex, for this hotel market update. And thank you all for participating in this call. We really appreciate your time and interest in Pandocs. Save the date for our interim report for Q3, which is published on October 25th. And we wish you all a very nice and relaxing summer and do not forget to stay at our hotel. Goodbye.