Apple Hospitality REIT Inc (APLE) 2020 Q2 法說會逐字稿

Greetings, and welcome to Apple Hospitality REIT Second Quarter 2020 Earnings Conference Call. (Operator Instructions) Please note, this conference is being recorded.

您好，歡迎參加 Apple Hospitality REIT 2020 年第二季財報電話會議。 （操作員指示）請注意，本次會議正在錄音。

It is now my pleasure to turn the conference over to your host, Kelly Clarke, Vice President, Investor Relations. Thank you. You may begin.

現在我很高興將會議交給主持人、投資者關係副總裁凱利克拉克 (Kelly Clarke)。謝謝。你可以開始了。

Thank you, and good morning. We welcome you to Apple Hospitality REIT's Second Quarter 2020 Earnings call on this, the seventh day of August 2020. Today's call will be based on the second quarter 2020 earnings release and Form 10-Q, which were distributed and filed yesterday afternoon.

謝謝，早安。歡迎您參加 Apple Hospitality REIT 於 2020 年 8 月 7 日舉行的 2020 年第二季財報電話會議。今天的電話會議將基於昨天下午分發和提交的 2020 年第二季財報和 10-Q 表。

As a reminder, today's call will contain forward-looking statements as defined by federal securities laws, including statements regarding future operating results and the impact of the company's business and financial condition from and measures being taken in response to COVID-19. These statements involve known and unknown risks and other factors which may cause actual results, performance or achievements of Apple Hospitality to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Participants should carefully review our financial statements and the notes thereto, as well as the risk factors described in Apple Hospitality's annual report on Form 10-K for the year ended December 31, 2019, quarterly report on Form 10-Q for the quarter ended June 30, 2020, and other filings with the SEC.

提醒一下，今天的電話會議將包含聯邦證券法所定義的前瞻性陳述，包括有關未來經營業績以及公司業務和財務狀況因 COVID-19 而受到的影響以及為應對 COVID-19 而採取的措施的陳述。這些聲明涉及已知和未知的風險和其他因素，可能導致 Apple Hospitality 的實際結果、業績或成就與此類前瞻性聲明表達或暗示的未來結果、業績或成就有重大差異。參與者應仔細審查我們的財務報表及其附註，以及 Apple Hospitality 截至 2019 年 12 月 31 日的年度報告 10-K 表、截至 2020 年 6 月 30 日的季度報告 10-Q 表以及向美國證券交易委員會提交的其他文件中所述的風險因素。

Any forward-looking statement that Apple Hospitality makes speaks only as of today, and the company undertakes no obligation to publicly update or revise any forward-looking statements, except as required by law. In addition, certain non-GAAP measures of performance, such as EBITDA, EBITDAre, adjusted EBITDAre, adjusted hotel EBITDA, FFO and modified FFO will be discussed during this call. We encourage participants to review reconciliations of those measures to GAAP measures as included in yesterday's earnings release and other filings with the SEC. For a copy of the earnings release, or additional information about the company, please visit applehospitalityreit.com.

Apple Hospitality 所做的任何前瞻性聲明僅代表今日的觀點，除非法律要求，否則本公司不承擔公開更新或修改任何前瞻性聲明的義務。此外，本次電話會議還將討論某些非 GAAP 績效指標，例如 EBITDA、EBITDAre、調整後的 EBITDAre、調整後的飯店 EBITDA、FFO 和修改後的 FFO。我們鼓勵參與者審查昨天的收益報告和向美國證券交易委員會提交的其他文件中包含的這些指標與 GAAP 指標的對帳。如需查看收益報告副本或有關該公司的更多信息，請訪問 applehospitalityreit.com。

This morning, Justin Knight, our Chief Executive Officer; and Liz Perkins, our Chief Financial Officer, will provide an overview of our results for the second quarter of 2020. Following the overview, we will open the call for Q&A.

今天上午，我們的執行長賈斯汀奈特 (Justin Knight)；我們的財務長 Liz Perkins 將概述我們 2020 年第二季的業績。概述之後，我們將開始問答環節。

At this time, it is my pleasure to turn the call over to Justin.

現在，我很高興將電話轉給賈斯汀。

Thank you, Kelly. Good morning, everyone. And thank you for joining us today. I hope that each of you and your loved ones are staying safe and well. The current operating environment is unlike anything we've experienced during our more than 20-year history in the lodging industry. Strength and resiliency of our portfolio and underlying strategy have been tested, the results are consistent with our expectations. Our portfolio of predominantly rooms-focused hotels that are aligned with industry-leading brands have broad consumer appeal and are diversified across 87 markets. Given the size, efficient design and location of our hotels, all of our hotels are currently open and accepting reservations with enhanced health and sanitation measures in place.

謝謝你，凱利。大家早安。感謝您今天加入我們。我希望你們每個人和你們的親人都平安健康。目前的經營環境與我們在住宿業二十多年的歷史中所經歷的任何環境都不同。我們的投資組合和基本策略的實力和彈性已經過測試，結果與我們的預期一致。我們的飯店組合主要以客房為主，與業界領先的品牌合作，對消費者俱有廣泛的吸引力，並且業務遍及 87 個市場。鑑於我們酒店的規模、高效的設計和位置，我們所有的酒店目前均已開放並接受預訂，並採取了加強的健康和衛生措施。

From the onset of the pandemic, we have been intently focused on maintaining a sound liquidity position, safeguarding long-term value for our shareholders and ensuring our ability to thrive in future years. Our initial efforts have been focused around reducing our cash burn and returning to cash flow positive as quickly as possible. Minimizing our cash burn in the near-term preserves the strength of our balance sheet, protects the value of our equity and positions us to take advantage of strategic opportunities in the early stages of a recovery. As the occupancy improves and markets begin to stabilize, we will look for ways to further optimize our portfolio through opportunistic dispositions and disciplined capital allocation. Major economic disruptions impact individual markets differently and thoughtful portfolio management will ensure that we are positioned appropriately. With a flexible balance sheet, we look for accretive opportunities that leverage our industry experience and the strength of our underlying platform as operations begin to stabilize. I'm confident we are uniquely positioned to weather the current operating challenges and outperform as travel recovers.

自從疫情爆發以來，我們一直專注於保持良好的流動性狀況，維護股東的長期價值，並確保我們在未來幾年蓬勃發展的能力。我們最初的努力集中在減少現金消耗並儘快恢復現金流為正。短期內盡量減少現金消耗可以保持我們資產負債表的強勁，保護我們股權的價值，並使我們能夠在復甦初期抓住戰略機會。隨著入住率的提高和市場開始穩定，我們將尋找透過機會性處置和嚴格的資本配置來進一步優化投資組合的方法。重大經濟動盪對各市場的影響不同，周到的投資組合管理將確保我們處於適當的位置。憑藉靈活的資產負債表，隨著營運開始穩定，我們尋找能夠利用我們的行業經驗和基礎平台優勢的增值機會。我相信，我們擁有獨特的優勢，能夠克服當前的營運挑戰，並在旅遊業復甦時取得優異表現。

When the initial shock of the COVID-19 pandemic and efforts to mitigate its spread hit the travel industry in mid-March, we worked with our management companies and made swift operational changes to staffing and service models, consolidated operations in certain markets, minimized utility usage on unused floors, reduced or eliminated operational costs, adjusted food and beverage offerings, reduced amenities, renegotiated hotel service contracts and modified our sales strategy to focus on sectors with continuing lodging needs.

3 月中旬，當 COVID-19 疫情的最初衝擊和減緩其蔓延的措施襲擊旅遊業時，我們與管理公司合作，迅速對人員配備和服務模式進行了運營調整，整合了某些市場的運營，最大限度地減少了閒置樓層的公用設施使用，降低或取消了運營成本，調整了餐飲供應，減少了便利設施，協商了酒店提供便利。

At the corporate level, we postponed all nonessential capital improvements projects for 2020. We suspended monthly distributions. We reduced board and senior executive compensation, and we terminated the written trading plan under our share repurchase program. Through our efforts, in collaboration with our property management teams, we were able to realize a cash burn during the month of April, a month when total portfolio occupancy was less than 18% that was in line with expectations we outlined during our first quarter call.

在公司層面，我們延後了 2020 年所有非必要的資本改善項目。我們暫停了每月分配。我們降低了董事會和高階主管的薪酬，並終止了股票回購計畫下的書面交易計畫。透過我們的努力，與我們的物業管理團隊合作，我們能夠在 4 月實現現金消耗，當月總投資組合入住率不到 18％，這符合我們在第一季電話會議上概述的預期。

In the most challenging economic and operating environment the industry has faced, we produced positive hotel level EBITDA for the quarter and positive corporate level EBITDA for the month of June. Based on top line results, we estimate we achieved positive cash flow in the month of July. Performance, of course, varies by market, and there remains significant uncertainty as to when operations at our hotels will return to 2019 levels. Given the ongoing uncertainties related to the depth and duration of the COVID-19 pandemic, we are not yet in a position to provide an operational outlook for the company. We have, however, demonstrated the resilience of our portfolio and the value of our strategy in a challenging environment.

在行業面臨的最具挑戰性的經濟和營運環境中，我們在本季度實現了正的酒店級 EBITDA，在 6 月實現了正的公司級 EBITDA。根據營收結果，我們估計七月實現了正現金流。當然，業績因市場而異，我們酒店的營運何時能恢復到 2019 年的水平仍存在很大的不確定性。鑑於與 COVID-19 疫情的深度和持續時間相關的持續不確定性，我們尚無法為該公司提供營運前景。然而，我們已經證明了我們的投資組合在充滿挑戰的環境中具有韌性，並且我們的策略具有價值。

As the economy recovers, we are exceptionally well positioned to benefit. Our assets, our affiliation with strong brands, our partnership with exceptional third party managers, our data-driven benchmarking approach to asset management, our balance sheet, our broad geographic diversification and our experienced team at Apple provide us with security in uncertain times and the ability to produce strong returns for our investors during periods of economic prosperity. In our continued effort to refine our portfolios to maximize performance over the long term, we have strategically partnered with trusted developers to invest in new non-prototypical assets in targeted markets. In April, we closed on the dual-branded Hampton Inn & Suites and Home2 Suites in Cape Canaveral, Florida, a development project, which we had contracted for in 2018. Purchase price was approximately $47 million, which was funded by $25 million of cash on hand and a note with the developers secured by the hotels for approximately $22 million that is payable in 2021. Highlighting our unique development contracts, subsequent to closing on these hotels and quarter end, we realized shared savings with the developer that resulted in an over $1 million reduction in the purchase price.

隨著經濟復甦，我們處於非常有利的地位，可以從中受益。我們的資產、我們與強大品牌的聯繫、我們與傑出的第三方管理者的合作、我們以數據為導向的資產管理基準方法、我們的資產負債表、我們廣泛的地域多元化以及我們在蘋果的經驗豐富的團隊，使我們在不確定的時期獲得了安全保障，並在經濟繁榮時期為我們的投資者帶來了豐厚的回報。我們不斷努力完善投資組合，以實現長期業績最大化，並與值得信賴的開發商建立策略合作夥伴關係，在目標市場投資新的非原型資產。 4 月份，我們完成了位於佛羅裡達州卡納維拉爾角的雙品牌漢普頓酒店及套房 (Hampton Inn & Suites) 和欣庭酒店 (Home2 Suites) 的開發項目，該項目我們於 2018 年簽訂了合約。購買價格約為 4,700 萬美元，資金來自 2,500 萬美元的庫存現金以及由酒店擔保的與開發商簽訂的約 2,200 萬美元的票據，該票據將於 2021 年支付。我們獨特的開發合約凸顯了這一點，在完成這些酒店交易並在季度末完成後，我們與開發商實現了共享成本節省，從而使購買價格降低了 100 多萬美元。

We anticipate closing on the dual-branded Hyatt House and Hyatt Place in Tempe, Arizona, a development project which we contracted for in 2018, later this month for a total purchase price of approximately $65 million. And the Hilton Garden Inn in Madison, Wisconsin, which we contracted for in 2019 for approximately $50 million, is currently under construction. Assuming all conditions to closing are met, we anticipate acquiring the Madison Hotel in 2021. In an effort to preserve our future liquidity, we terminated the contract for the purchase of a to-be-developed Courtyard by Marriott in Denver, Colorado during the quarter.

我們預計將於本月稍晚完成位於亞利桑那州坦佩的雙品牌凱悅嘉寓酒店和凱悅廣場酒店的開發，該項目於 2018 年簽約，總收購價約為 6500 萬美元。我們於 2019 年簽訂了價值約 5000 萬美元的威斯康星州麥迪遜希爾頓花園酒店合同，該酒店目前正在建設中。假設所有成交條件都已滿足，我們預計將於 2021 年收購麥迪遜酒店。為了保持未來的流動性，我們在本季度終止了購買位於科羅拉多州丹佛市的即將開發的萬怡酒店的合約。

Historically, new supply has followed demand trends. And while we have not yet seen a meaningful decline in new supply across our markets, we anticipate the pandemic's unprecedented impact on demand and the economy overall will meaningfully slow the level of new construction starts over the next several years.

從歷史上看，新的供應總是遵循需求趨勢。儘管我們尚未看到整個市場新增供應量明顯下降，但我們預計，疫情對需求和整體經濟的空前影響將顯著減緩未來幾年新開工率。

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Continue to explore disposition opportunities. And during the quarter, we entered into a contract for the sale of our Homewood Suites in Memphis, Tennessee for approximately $9 million. Though we anticipate that total transaction volume for the industry will be down through the remainder of the year, we will continue to opportunistically pursue transactions that further refine and enhance our portfolio.

繼續探索處置機會。本季度，我們簽訂了一份合同，以約 900 萬美元的價格出售位於田納西州孟菲斯的 Homewood Suites。儘管我們預計今年剩餘時間內該行業的總交易量將會下降，但我們將繼續抓住機會尋求交易，以進一步完善和增強我們的投資組合。

We have consistently reinvested in our existing hotels to maintain their value and to ensure their market competitiveness. As a result of these investments and the quality of our on-site management teams, our portfolio has consistently outperformed on measures of guest satisfaction and benefited from strong market share. With the temporary easing of brand renovation requirements and in an effort to preserve capital, we've postponed all nonessential capital improvement projects for the year, reducing our anticipated 2020 spend by approximately $50 million.

我們持續對現有飯店進行再投資，以維持其價值並確保其市場競爭力。由於這些投資以及我們現場管理團隊的素質，我們的投資組合在客戶滿意度方面一直表現出色，並受益於強大的市場份額。隨著品牌改造要求的暫時放寬，為了節省資金，我們推遲了今年所有非必要的資本改善項目，從而將 2020 年的預期支出減少了約 5000 萬美元。

During the 6 months ended June 30, 2020, we invested approximately $30 million in capital expenditures, completing renovations at 16 hotels started prior to the onset of COVID-19. July, we completed renovation work at our Hilton Garden Inn in Islip, and we expect completion of our Richmond Marriott renovation to occur late this summer. We anticipate spending an additional $5 million to $10 million during the remainder of the year. We have always maintained a conservative capital structure to provide stability for the company during periods of economic volatility, the flexibility to respond to changes in the operating environment and the ability to act on opportunities that may arise within the marketplace. In June, we entered into amendments to each of our credit facilities to suspend the financial covenants under the credit agreement until June 30, 2021, while still allowing us to make investments in new acquisitions and in our existing hotels. We are grateful for the strong relationships we have with our lenders and for their willingness to work with us to make adjustments necessary in the current environment.

在截至 2020 年 6 月 30 日的 6 個月內，我們投資了約 3000 萬美元的資本支出，完成了在 COVID-19 爆發前開始的 16 家酒店的翻新工程。 7 月，我們完成了艾斯利普的希爾頓花園酒店的翻新工程，我們預計里士滿萬豪酒​​店的翻新工程將於今年夏末完成。我們預計今年剩餘時間將額外支出 500 萬至 1,000 萬美元。我們始終保持保守的資本結構，以便在經濟波動時期為公司提供穩定性、靈活應對經營環境變化的能力以及抓住市場中可能出現的機會的能力。 6 月，我們對每項信貸安排進行了修訂，暫停信貸協議下的財務契約直至 2021 年 6 月 30 日，同時仍允許我們對新收購和現有酒店進行投資。我們感謝與貸款機構建立的牢固關係，以及他們願意與我們合作在當前環境下做出必要的調整。

Apple Hospitality was intentionally structured to weather challenging times and to produce attractive returns during periods of economic prosperity. We have strengthened and refined our ownership strategy over 20 years in the lodging industry and through multiple economic cycles. During our first quarter call, I highlighted the fact that we were uniquely positioned because of the type of assets we own, our geographic diversification, our efficient corporate structure and our relatively low leverage to be among the first to benefit from relaxed restrictions and a reopening of the economy.

Apple Hospitality 的設計初衷是為了抵禦挑戰，並在經濟繁榮時期產生可觀的回報。我們在住宿業中經歷了 20 多年的發展以及多個經濟週期，不斷加強和完善我們的所有權策略。在第一季電話會議上，我強調了這樣一個事實：由於我們所擁有的資產類型、我們的地理多元化、我們高效的公司結構以及我們相對較低的槓桿率，我們具有獨特的優勢，能夠成為首批受益於放寬限制和經濟重新開放的公司之一。

Our business was and continues to be materially impacted by the COVID-19 pandemic. By May, we were producing positive hotel EBITDA. And in June, we were just shy of covering all corporate level costs, including principal and interest on our loans. We anticipate that we will produce positive cash flow at the corporate level in July, well before the majority of our peers.

我們的業務過去和現在都受到 COVID-19 疫情的重大影響。到五月份，我們的飯店 EBITDA 已達到正值。 6 月份，我們幾乎無法彌補所有公司層級的成本，包括貸款本金和利息。我們預計，7 月公司層面的現金流將達到正值，遠早於大多數同業。

The challenges facing the industry are complex and we do not anticipate that the path to recovery will follow a straight line. However, we have consistently articulated the strategic benefits of owning a rooms-focused portfolio diversified across locations, market types, brands and hotel operators. The current environment has provided the ultimate test of our assertion that our strategy would provide for relative stability during periods of economic difficulty. Our hotels have proven appeal with the broadest group of potential customers. And the association with top brands, combined with the strong value proposition of the upscale select service model, have historically led to strong performance during all phases of economic cycles. Our team has a track record of creating value during challenging economic periods, and I am confident that we will emerge from the current crisis well positioned to outperform.

該行業面臨的挑戰是複雜的，我們預計復甦之路不會一帆風順。然而，我們始終明確表示，擁有以客房為中心、跨地區、跨市場類型、跨品牌、跨酒店營運商的多元化投資組合具有戰略優勢。當前的環境對我們的斷言進行了最終的檢驗，即我們的策略將在經濟困難時期提供相對的穩定。事實證明，我們的酒店對最廣泛的潛在客戶群具有吸引力。與頂級品牌的合作，加上高檔精選服務模式的強大價值主張，歷來在經濟週期的各個階段都帶來了強勁的表現。我們的團隊在經濟困難時期創造了價值，我相信我們將能夠走出當前的危機，並取得優異表現。

It's now my pleasure to turn the call over to Liz.

現在我很高興將電話轉給 Liz。

Thank you, Justin. And thank you, everyone, for joining us this morning. We entered the quarter with weekly occupancy around 16% for our portfolio. By mid-April, we began to see some improvement as our team worked diligently to focus our sales efforts on COVID-19 specific opportunities to maximize performance based on available demand. In addition to first responders and other business directly related to the pandemic, we were also able to successfully market to other demand generators, such as leisure, which grew stronger as we entered the summer months; construction; manufacturing; project business and government.

謝謝你，賈斯汀。感謝大家今天上午加入我們。進入本季度，我們投資組合的每週入住率約為 16%。到 4 月中旬，我們開始看到一些改善，因為我們的團隊努力將銷售工作重點放在 COVID-19 的特定機會上，以根據現有需求最大限度地提高業績。除了急救人員和其他與疫情直接相關的業務外，我們還成功地向其他需求產生者進行了營銷，例如休閒業務，隨著進入夏季，休閒業務變得更加強勁；建造;製造業;項目業務和政府。

Occupancy steadily improved each month during the quarter. And for the month of June, our hotels achieved occupancy of 38% at an average daily rate of $105. Positive trends have generally continued, and we finished the month of July at an occupancy of approximately 45%. The immediate impact of COVID-19 in March was broad-based. And for the month of April, more than 50% of our hotels were running less than 15% occupancy. And only 6% had occupancies above 50%. We began to see improvements in May, with 27% of our hotels running less than 15% occupancy and 18% of our hotels at occupancy levels of 50% or greater. In June, 15% of our hotels ran less than 15% occupancy and 32% of our hotels had occupancies above 50%. By the end of July, almost half of our portfolio was running at or above 50% occupancy and only 6% of our hotels had occupancy below 15%, 18 of which were intentionally consolidated in market clusters.

本季入住率每月穩定提高。 6 月份，我們飯店的入住率為 38%，平均每日房價為 105 美元。總體而言，積極的趨勢仍在持續，7 月的入住率約為 45%。 3 月份，新冠疫情的直接影響是廣泛的。 4 月份，我們超過 50% 的飯店入住率低於 15%。其中入住率超過 50% 的僅佔 6%。我們從 5 月開始看到改善，27% 的飯店入住率低於 15%，18% 的飯店入住率達到或超過 50%。 6 月份，我們 15% 的飯店入住率低於 15%，32% 的飯店入住率超過 50%。截至 7 月底，我們投資組合中幾乎一半的酒店的入住率達到或超過 50%，只有 6% 的酒店入住率低於 15%，其中 18 家酒店有意合併到市場集群中。

Our asset management and hotel management teams have done a tremendous job working to identify top line opportunities across our markets and maximize operations in the current environment. Several characteristics of our portfolio have and will continue to position us for outperformance, both in the current environment as well as in the recovery. Our portfolio is broadly diversified with almost 80% of our rooms located outside of urban markets, limiting our dependence on international travel and large convention business, allowing us to realize greater benefit from areas that have eased travel restrictions. Extended stay and suite properties account for over 50% of our rooms, which have consistently had strong consumer appeal, but also provide ideal accommodations to those most likely to be traveling in the current environment.

我們的資產管理和酒店管理團隊做了大量工作，致力於發現我們市場中的頂級機會並在當前環境下最大限度地提高營運。無論是在當前環境或經濟復甦中，我們投資組合的幾個特點已經並將繼續使我們取得優異表現。我們的投資組合非常多樣化，幾乎 80% 的客房位於城市市場之外，這限制了我們對國際旅行和大型會議業務的依賴，使我們能夠從放寬旅行限制的地區獲得更大的利益。長住酒店和套房占我們客房總數的 50% 以上，這些客房一直具有強大的消費者吸引力，同時也為那些最有可能在當前環境下出行的人提供了理想的住宿。

Our reliance on group demand, which is expected to take the longest to recover, is low, with only 14% of our traditional room night mix coming from this segment. The majority of our properties are located in drive-to markets, which has allowed us to benefit from the recent relative strength of leisure demand, but will also allow us to capitalize on regional business travel expected to return before larger corporate demand.

我們對團體需求的依賴程度較低，預計團體需求的恢復時間最長，我們傳統客房夜數組合中只有 14% 來自該細分市場。我們的大部分飯店都位於駕車前往的市場，這不僅讓我們受益於近期相對強勁的休閒需求，也讓我們能夠利用預計將在更大的企業需求之前恢復的區域商務旅行。

Our leisure markets in the southeast were particularly strong in the quarter, but we also experienced higher occupancies in several others, including Suffolk, pockets of Houston, El Paso, Newark and Anchorage, with demand in those markets coming primarily from construction, military, airline crew and disaster recovery business. In addition to improvements in the top line performance during the quarter, we grew operational efficiencies and are pleased to have achieved steady improvement in bottom line performance as we progressed through the quarter.

本季度，我們東南部的休閒市場表現特別強勁，但我們在其他幾個地區的入住率也有所提高，包括薩福克、休士頓部分地區、埃爾帕索、紐瓦克和安克雷奇，這些市場的需求主要來自建築、軍事、航空機組人員和災難復原業務。除了本季營業收入表現的改善之外，我們還提高了營運效率，並且很高興看到本季的獲利表現穩定提升。

Adjusted hotel EBITDA for the month of June was $8 million, and for the quarter was $704,000.

6 月調整後飯店 EBITDA 為 800 萬美元，本季調整後飯店 EBITDA 為 704,000 美元。

Due to the swift efforts of our team and our hotel operators to implement a variety of cost elimination and efficiency initiatives at each of our hotels, hotel operating expenses were reduced by 67% during the quarter as compared to last year, with all of our hotels open and receiving reservations. In markets where we own multiple assets, we have intentionally consolidated operations and occupancy in order to gain incremental efficiency. As of June 30, 18 of our hotels had consolidated operations, down from 38 hotels in May. We continue to reduce this number as occupancies improve.

由於我們的團隊和飯店業者迅速努力在每家飯店實施各種成本削減和效率提升舉措，本季飯店營運費用與去年相比減少了 67%，而且我們所有的飯店均已開業並接受預訂。在我們擁有多項資產的市場中，我們有意整合營運和入住率，以提高效率。截至 6 月 30 日，我們已有 18 家酒店實現了合併運營，少於 5 月份的 38 家。隨著入住率的提高，我們將繼續減少這個數字。

Once our asset management team established new labor and operating models appropriate to navigate the extreme low occupancies experienced at the onset of this crisis, they quickly transitioned and began working with each of our management companies to set models at various occupancy levels in an effort to prepare for the variability and recovery across markets and hotels. In establishing these labor models and operating plans, our team leveraged benchmarking across all of our management companies, sharing best practices and optimizing the plans as a result. Reestablishing labor models and operating plans based on various occupancy levels has allowed us to proactively ensure we have the appropriate framework to maximize performance as occupancies increase. We have worked diligently with our managers to ensure that our approach is well balanced with sufficient measures and resources deployed to protect the physical asset, our associates and our guests staying intently focused on setting our hotels up for success over the long term.

一旦我們的資產管理團隊建立了適合應對危機開始時極低入住率的新勞動力和營運模式，他們就會迅速轉型並開始與我們的每個管理公司合作，在不同的入住率水平上製定模型，以應對市場和酒店之間的變化和復蘇。在建立這些勞動模式和營運計劃時，我們的團隊利用所有管理公司的基準，分享最佳實踐並最終優化計劃。根據不同的入住率重新建立勞動力模型和營運計劃使我們能夠主動確保擁有適當的框架，以便在入住率增加時最大限度地提高績效。我們與管理人員勤勉合作，確保我們的方法與部署的充分措施和資源保持平衡，以保護有形資產、我們的員工和客人，並全心全意地致力於讓我們的酒店取得長期成功。

During our last call, with these operational adjustments in mind, we estimated our monthly cash burn rate, including property level expenses, corporate G&A, property taxes, insurance and debt service would be approximately $18 million at an occupancy level -- at occupancy levels between 15% and 20%. We were able to meet these estimates while operating at the lowest occupancy levels and continue to reduce our cash burn throughout the quarter as occupancies increase, and we estimate we achieved positive cash flow in July with approximately 45% occupancy.

在我們上次電話會議中，考慮到這些營運調整，我們估計我們的每月現金消耗率（包括物業層面的費用、企業一般及行政費用、物業稅、保險和債務服務）在入住率水平（入住率在 15% 至 20% 之間）下約為 1800 萬美元。我們能夠在最低入住率水平下運營的同時滿足這些估計，並且隨著入住率的提高，我們在整個季度繼續減少現金消耗，我們估計我們在 7 月份實現了正現金流，入住率約為 45％。

The current operating environment remains incredibly uncertain with growing concerns related to new COVID-19 cases in recent weeks and some cost increases as we implement enhanced cleaning standards across our portfolio and add back staff to service higher occupancies at some of our hotels. However, we continue to believe we are well positioned to flex as necessary as these challenges arise and mitigate the impact to our liquidity. With significant representation on brand advisory councils, we are actively involved in discussions related to increasing the efficiency of future service and staffing models in ways that will more than offset potential cost increases related to the implementation of enhanced health and safety protocols and improve long-term operating margins.

當前的營運環境仍然極不確定，最近幾週人們對新的 COVID-19 病例的擔憂日益加劇，而且由於我們在整個投資組合中實施了更嚴格的清潔標準，並增加了員工以服務一些入住率更高的酒店，一些成本也隨之增加。然而，我們仍然相信，當這些挑戰出現時，我們有能力根據需要靈活應對，並減輕對我們流動性的影響。憑藉在品牌諮詢委員會中的重要代表地位，我們積極參與有關提高未來服務和人員配置模式效率的討論，這些討論將不僅抵消與實施加強健康和安全協議相關的潛在成本增加，還能夠提高長期營運利潤率。

We have always believed that maintaining a strong balance sheet would provide us with stability during periods of economic difficulty and flexibility to act opportunistically. We entered the current downturn with net debt-to-EBITDA of approximately 3.1x. As of June 30, 2020, we had approximately $1.6 billion of total debt outstanding with a current combined weighted average interest rate of approximately 3.8%, cash on hand of approximately $156 million and availability under our revolving credit facility of approximately $225 million. Excluding unamortized debt issuance cost and fair value adjustments, the company's total outstanding indebtedness is comprised of approximately $519 million in property level debt secured by 33 hotels and approximately $1.1 billion outstanding on our unsecured credit facilities. In March to increase readily available liquidity, we drew down the remaining availability under our $425 million revolving credit facility.

我們始終相信，維持強勁的資產負債表將使我們在經濟困難時期保持穩定，並靈活地採取機會行動。我們進入當前經濟低迷時期時，淨債務與 EBITDA 比率約為 3.1 倍。截至 2020 年 6 月 30 日，我們的未償還債務總額約為 16 億美元，目前綜合加權平均利率約為 3.8%，現金約為 1.56 億美元，可用循環信貸額度約為 2.25 億美元。不包括未攤銷的債務發行成本和公允價值調整，該公司的未償還債務總額包括由 33 家酒店擔保的約 5.19 億美元的房地產債務和約 11 億美元的無擔保信貸額度。 3 月份，為了增加可用的流動資金，我們動用了 4.25 億美元循環信貸額度下的剩餘可用資金。

As a result of entering into amendments to our credit facilities and the effective reduction in our monthly cash burn resulting from improved occupancies and cost containment efforts, the company repaid approximately $225 million and $100 million of borrowings under our revolving credit facility in June and July, respectively. The reduced borrowings on our line generate approximately $2 million in quarterly interest savings. [To preserve] capital in the current environment, we also suspended monthly distributions, beginning with the April distribution, postponed nonessential capital improvement projects, terminated the written trading plan under our share repurchase program and meaningfully reduced corporate level G&A. At June 30, 2020, the company's total debt to total capitalization net of cash and cash equivalents was approximately 40% and weighted average debt maturities were 5 years, with no maturities for the remainder of 2020 and $53 million net of reserves maturing in 2021.

由於對我們的信貸安排進行了修改，並且由於入住率提高和成本控制措施導致我們的每月現金消耗有效減少，公司分別於 6 月和 7 月償還了循環信貸安排下約 2.25 億美元和 1 億美元的借款。我們減少的借款每季可節省約 200 萬美元的利息。 [為了在]當前環境下保留資本，我們也從 4 月份的分配開始暫停了每月的分配，推遲了非必要的資本改善項目，終止了股票回購計劃下的書面交易計劃，並大幅削減了公司層面的一般及行政費用。截至 2020 年 6 月 30 日，該公司的總債務與扣除現金和現金等價物後的總資本化比率約為 40%，加權平均債務到期日為 5 年，2020 年剩餘時間內無到期債務，2021 年到期的儲備淨額為 5,300 萬美元。

As Justin mentioned, effective June 5, we successfully entered into amendments to each of our credit facilities that suspend the testing of financial covenants under our credit facilities through June 30, 2021, with the option for us to opt out if things improve and modify the calculations for the following year, allowing for additional flexibility following the covenant relief period. The terms of the amendment include minimum liquidity requirements and limitations on share repurchases and cash dividend payments. However, during the waiver period, the amendment does allow for up to $50 million in discretionary capital expenditures and up to $370 million in acquisitions, including the allowance for properties currently under contract, preserving flexibility to be opportunistic.

正如賈斯汀所提到的，自 6 月 5 日起，我們成功地對每項信貸安排進行了修訂，暫停對信貸安排下的財務契約進行測試，直至 2021 年 6 月 30 日，如果情況有所改善，我們可以選擇退出並修改下一年度的計算，從而在契約救濟期後提供更多的靈活性。修訂條款包括最低流動性要求以及對股票回購和現金股利支付的限制。然而，在豁免期間，該修正案確實允許最多 5,000 萬美元的可自由支配資本支出和最多 3.7 億美元的收購，其中包括目前已簽訂合約的財產的津貼，從而保留了機會主義的靈活性。

Throughout our history, we have fostered strong relationships with our lenders. We appreciate their confidence in our ability to manage this current crisis and are grateful for their continued support during these challenging times. I also want to thank our teams who have worked tirelessly to optimize performance in the most challenging operating environment our industry has ever faced. Their efforts and experience, coupled with the strength of our platform, have put us in a position where at current occupancy levels, we expect to be cash flow positive preserving liquidity as we navigate through this crisis and giving us great ability to be opportunistic as we look to bring long-term value to our shareholders.

在我們的整個歷史中，我們與貸方建立了牢固的關係。我們感謝他們對我們應對當前危機的能力的信心，並感謝他們在這些充滿挑戰的時期給予的持續支持。我還要感謝我們的團隊，他們在我們行業面臨的最具挑戰性的營運環境中不懈努力地優化績效。他們的努力和經驗，加上我們平台的實力，使我們處於這樣的地位：在目前的入住率水平下，我們預計現金流為正，從而在我們度過這場危機時保持流動性，並使我們有很大的能力抓住機會，為股東帶來長期價值。

We will now open the call to questions.

我們現在開始提問。

(Operator Instructions) Our first question comes from Austin Wurschmidt with KeyBanc.

（操作員指示）我們的第一個問題來自 KeyBanc 的 Austin Wurschmidt。

Congratulations on getting back to the breakeven level. What I'd like to understand, I guess, is as you look out, could we continue to see occupancy move higher as you look into August and September or whatever visibility on bookings you have, or do you think it's possible that maybe performance is peaking out here just given the lack of corporate demand and will require kind of corporate demand coming back to see that next leg up?

恭喜您恢復到損益平衡水準。我想了解的是，正如您所看到的，當您展望 8 月和 9 月時，我們是否會繼續看到入住率走高，或者無論您對預訂情況如何，或者您是否認為，由於缺乏企業需求，業績可能已經達到頂峰，需要企業需求的回歸才能看到下一輪上漲？

Thank you, Austin, and a good question, obviously. If the last 6 months have proven anything to us, it's that anything is possible. And I think, we're fortunate now to have explored occupancy levels and operating models at those occupancy levels that we had in our 20-year experience in the industry not seen before. And I think should there be a dip, we are adequately prepared to make the adjustments necessary to ensure minimal cash burn during that period of time. That said, we're cautiously optimistic that things continue. And I think we have reason to feel that way. I highlighted in my remarks that we don't anticipate that the path forward will be -- follow a straight line. There will likely be bumps in the road. But we're incredibly well positioned. I think having a broadly diversified portfolio gives us exposure to the largest number of different regions of the country and demand generators related to those areas and gives us, I think, increased confidence that we're well positioned regardless of what the future brings.

謝謝你，奧斯汀，顯然這是一個好問題。如果過去六個月向我們證明了什麼，那就是一切皆有可能。我認為，我們現在很幸運，能夠探索出我們 20 年行業經驗中從未見過的入住率和營運模式。我認為，如果出現下滑，我們已做好充分準備，做出必要的調整，以確保在此期間將現金消耗降至最低。儘管如此，我們對事情的持續發展持謹慎樂觀的態度。我認為我們有理由這麼想。我在發言中強調，我們預期前進的道路不會是直線前進。前進的道路上很可能會出現坎坷。但我們的定位非常有利。我認為，擁有廣泛多元化的投資組合可以讓我們接觸到全國最多數量的不同地區以及與這些地區相關的需求生成器，並且我認為，無論未來發生什麼，這都讓我們更加有信心，我們處於有利地位。

I appreciate the thoughts. And then maybe another one for you, Justin. So despite achieving that breakeven level in July, the balance sheet certainly in relatively good position now being back at those levels and preserving that capacity. You're under contract to sell a small asset, which ostensibly, I think, you might think it's the worst time you'd want to be a seller right now. So can you just help us understand the decision process, maybe give us a sense of what valuation looks like on this one deal, knowing that it's relatively small, but what the appetite is for additional sales sort of in the back half of the year?

我很欣賞這些想法。那也許還有一個給你，賈斯汀。因此，儘管 7 月實現了盈虧平衡，但資產負債表現在肯定處於相對良好的狀態，已回到這些水平並保持了這種能力。你簽訂了出售一項小資產的合同，我認為，表面上，你可能會認為現在是你成為賣家最糟糕的時機。那麼，您能否幫助我們了解決策過程，讓我們了解這筆交易的估值情況，知道這筆交易相對較小，但在今年下半年對額外銷售的興趣如何？

Absolutely. I highlighted in my remarks that our expectation is and always has been that markets change over time and the relevance and appeal of our assets in those markets changes as well. We've been consistent from the beginning in our approach to our portfolio, looking for opportunities to buy and sell assets in ways that enhance the overall value.

絕對地。我在發言中強調，我們的預期是，並且一直是，市場會隨著時間而變化，我們的資產在這些市場中的相關性和吸引力也會變化。我們從一開始就始終如一地對待我們的投資組合，尋找以提高整體價值的方式買賣資產的機會。

The conversation related to the Memphis asset began prior to the pandemic. The buyer is a private equity investor, interested in investing in the hotel for an alternative use by conversion to multifamily. And this particular asset is somewhat of an outlier in our portfolio in that it's over 30 years old and is a first-generation Home2 Suites, with a combination of interior and exterior corridors. As we looked at over the next several years, the renovation needs of the property, which we viewed as being substantial in the $35,000 to $40,000 [key] range, and the prospects for that hotel long term, it made sense for us to consider it as a potential disposition. And pricing on that particular asset was attractive. And the buyer, I think, again, in part because the intended use was something other than hotels, has maintained pricing on it and which was attractive on a cap rate basis, coming in well below 7% pre -- on 2019 numbers, pre-CapEx and in the neighborhood of a [4] cap, if you factor in forward renovation dollars that we anticipated.

有關孟菲斯資產的討論在疫情爆發之前就開始了。買家是一位私募股權投資者，有意投資該酒店，將其改建成多戶住宅，用於其他用途。而這項特定資產在我們的投資組合中有些異常，因為它已有 30 多年的歷史，並且是第一代 Home2 Suites，結合了內部和外部走廊。考慮到未來幾年該酒店的裝修需求（我們認為裝修費用大約在 35,000 至 40,000 美元之間）以及該酒店的長期前景，我們認為將其視為一種潛在的處置方式是合理的。而且該特定資產的定價很吸引人。而且我認為，買家繼續維持定價，部分原因是預期用途不是酒店，而且按資本化率計算也很有吸引力，遠低於 2019 年數據的 7% 左右，即資本支出前，如果將我們預期的未來裝修費用考慮在內，則接近 [4] 的上限。

So again, something of an anomaly within our portfolio. But from a strategic standpoint, I think wholly consistent with our intent from the very beginning. And certainly, something, as I highlighted in my remarks, that we'll be even more focused on over the next several months as we see how markets emerge from the current environment, wanting to ensure that we are well positioned from a concentration standpoint in those markets, which are most likely to outperform.

這又一次顯示我們的投資組合出現了異常。但從策略角度來看，我認為這完全符合我們一開始的意圖。當然，正如我在發言中所強調的那樣，在接下來的幾個月裡，隨著市場如何擺脫當前環境，我們將更加關注這個問題，希望確保我們在最有可能表現優異的市場中從集中度的角度處於有利地位。

Our next question comes from Neil Malkin with Capital One Securities.

我們的下一個問題來自 Capital One Securities 的 Neil Malkin。

I just wanted to first off echo Austin's comments. Great job getting back to -- and then above breakeven and on a cash flow basis. Really a testament to your guys' strategy, so.

我首先想附和奧斯汀的評論。幹得好，回到損益平衡點並建立在現金流基礎上。這確實證明了你們的策略。

So first question, just in terms of the sort of spotty business, travel business, transient customer, can you maybe talk about the differences, if any, that you're seeing in, first off, your more, I guess, your larger primary markets, like maybe in Southern California versus some of your more, I guess, secondary or tertiary markets? And then maybe if you're -- the difference you're hearing from local versus national accounts at your hotel, just in terms of planned resumption of travel? Or the strength of the negotiating season you had with them? That would be great.

所以第一個問題，就這種不穩定的業務、旅遊業務和臨時客戶而言，您能否談談您所看到的差異（如果有的話），首先，我想，您的更大的主要市場，比如南加州，與您的一些更多的，我想，二級或三級市場？那麼，也許您——您從酒店的本地帳戶和全國帳戶聽到的關於計劃恢復旅行的消息有什麼不同嗎？或者您與他們談判的強度如何？那太好了。

As far as trends in California versus tertiary, I think broadly, still we're seeing suburban outperform urban on an absolute basis. We still are seeing higher occupancies in suburban markets. And seeing the weakest occupancies in our most urban core markets where historically, they may have benefited from citywides and convention. So our downtown Denver asset or Atlanta, right next to Mercedes. And some of those markets are struggling more than the suburban assets and more drive-to -- drive-to locations. California, interestingly, even as cases have spiked, whether it be in the Sunbelt area or California, we've seen mixed recent trends as a result of that. California over the last week, day-over-day, is still showing increases every day of the week from an occupancy standpoint. Arizona as well. Whereas Alabama, weekday is seeing some increases in occupancy, but weekend has softened a little bit, but not dramatically. And so the trends are -- I guess it's even challenging to call them trends. They're not all similar even where we're seeing similar, I guess, themes around common cases. So we're still seeing strength in the Sunbelt in the Southeast and California. And by and large, suburban outperforming urban.

就加州與高等教育的趨勢而言，我認為從總體上看，我們仍然看到郊區在絕對基礎上的表現優於城市。我們仍然看到郊區市場的入住率較高。我們看到，在我們最核心的城市市場中，入住率最低，而從歷史上看，這些市場可能受益於全市範圍的活動和會議。因此，我們的資產位於丹佛市中心或亞特蘭大，緊鄰梅賽德斯。其中一些市場比郊區資產和駕車前往的地點面臨更大的困境。有趣的是，加州，即使病例激增，無論是在陽光地帶還是加州，我們都看到了近期好壞參半的趨勢。從入住率的角度來看，過去一周，加州的入住率每天都在增加。亞利桑那州也是如此。而在阿拉巴馬州，平日的入住率增加，週末的入住率略有下降，但幅度不大。所以趨勢是——我想甚至稱它們為趨勢都具有挑戰性。即使我們看到了圍繞常見案例的類似主題，但它們並不都是相似的。因此，我們仍然看到東南部陽光地帶和加州的強勁勢頭。整體而言，郊區的表現優於市區。

Got it. And then, yes, just in terms of the local versus national conversation in terms of the corporates that you do have, any additional commentary there or things to call out?

知道了。是的，就您所在的企業在地方和全國範圍內的對話而言，您還有什麼補充評論或需要指出的事項嗎？

I think -- I'm sure you heard [Chris] yesterday. He gave some really good color on corporate negotiated accounts. I think he's hearing a variety of things from we want to capitalize from a rate perspective on your need for our business, but we're not sure that we can commit volume to some that say we will travel and -- but we understand the environment you're in, and we'll take a percentage off of [PAR] or keep rates flat in line with negotiated rates in the previous year. Again, I'm not sure committing to any significant increase in volume or even the same volume as previous year. So I think those conversations are ongoing, both with the brands and for our hotels. I think we work to try to find a situation where we still are the preferred hotel for any corporate or local account that's traveling. But we're in the middle of sort of those corporate negotiated conversations. Locally, I'd say those are going to depend on market, but we've certainly seen property direct business increase since the pandemic hit. And some of that would be groups related to the first responders or government or some of the business that's unique to the pandemic itself. And some is business that's been in market that we just haven't had to take historically, but is more local in nature. And so I do think we're seeing some strength in local negotiated accounts or local group business. I think that, that's likely to come back before corporate negotiated. I think regional drive-to locations, I think it's broadly anticipated in the industry that, that will perform ahead of corporate -- large corporate national accounts.

我想——我確信你昨天聽到了[克里斯]的話。他對公司協商帳戶做出了非常好的闡述。我認為他聽到了各種各樣的事情，我們希望從利率的角度來滿足您對我們業務的需求，但我們不確定我們是否可以向一些說我們會旅行的人承諾數量 - 但我們了解您所處的環境，並且我們將從[PAR]中扣除一定比例或保持利率與上一年協商的利率持平。再說一次，我不確定是否會大幅增加銷量，甚至是否能達到與去年相同的銷售。所以我認為這些對話仍在進行中，無論是與品牌還是與我們的酒店。我認為，我們會努力尋找一種情況，讓我們仍然是任何企業或本地客戶旅行的首選酒店。但我們正處於某種企業協商對話之中。從當地來看，我想說這些將取決於市場，但自從疫情爆發以來，我們確實看到房地產直銷業務有所成長。其中一些是與急救人員或政府相關的團體，或是一些與疫情本身相關的獨特業務。有些業務是我們歷史上從未涉足過的市場業務，但本質上更具本地性。因此我確實認為我們看到了本地協商帳戶或本地團體業務的一些優勢。我認為，這很可能在公司談判之前就再次出現。我認為，業界普遍預期區域性駕車前往地點的表現將領先於企業——大型企業全國帳戶。

Okay. Great. And then another one for me is, you -- I guess, maybe along the same lines, you kind of mentioned this in your press release, but what are some of the things you're doing either from an asset manager, property manager level to gain opportunistic business or just additional business in creative ways, particularly as leisure demand tapers off toward the end of the year?

好的。偉大的。然後對我來說另一個問題是，你——我想，也許沿著同樣的思路，你在新聞稿中提到了這一點，但是從資產經理、物業經理的層面上，你正在做哪些事情來獲得機會性業務或只是以創造性的方式獲得額外的業務，特別是在年底休閒需求逐漸減少的情況下？

I think I can start on this, and Liz can fill in. Key to our success in this area has been keeping our hotels open. So -- and as we looked at staffing models, reduced staffing models for hotels, there were -- 2 remained open during the toughest periods in April. We were careful to maintain key salespeople where possible, such that we were well positioned to continue our efforts on the sales side. And I think it would be -- it'd be wrong to underestimate the positive impact that's had as we've begun to see stronger recoveries, having the hotel open, taking reservations for the entirety of the time period and retaining talent on the sales side, have both given us a leg up as business returns in market, and put us ahead of ahead of others who took more drastic measures in order to cut costs in the short term. We were able to do that, I think, in large part, because of the operating model for our hotels and our ability to run them with so few people total.

我想我可以開始做這件事，然後莉茲可以補充。我們在這個領域取得成功的關鍵是保持酒店營業。因此，當我們研究飯店的人員配備模式和減少的人員配備模式時，我們發現，在 4 月最艱難的時期，只有 2 家飯店仍在營業。我們盡可能地留住關鍵銷售人員，以便我們能夠更好地繼續在銷售方面做出努力。我認為，低估其帶來的正面影響是錯誤的，因為我們已經開始看到更強勁的復甦，酒店開業、在整個期間接受預訂以及留住銷售人才，都為我們在市場業務回報方面提供了優勢，並使我們領先於那些為了在短期內削減成本而採取更激烈措施的公司。我認為，我們之所以能夠做到這一點，很大程度上是因為我們酒店的營運模式以及我們用很少的人力就能經營酒店的能力。

And beyond that, we've been incredibly targeted. And I'd like to say our management teams are even scrappy in that over the years, we've been through multiple cycles. And they are accustomed to operate in highly competitive markets and going after the business that's available. And because of the broad appeal of our assets, sometimes that means leisure, sometimes that means property direct, local negotiated business. Sometimes that's managing our revenue management systems in order to optimize business that's readily available and coming through brand channels or OTAs. And I think what we've highlighted and validated is the strength of the individual management companies that we work with, the quality of their on-site and above property staff and really, quite frankly, the ability of our asset management teams to work with those groups to get the absolute best results possible in market.

除此之外，我們也成為了極為嚴重的攻擊目標。我想說的是，我們的管理團隊甚至很頑強，因為多年來，我們經歷了多個週期。他們習慣在競爭激烈的市場中運作並爭取可用的業務。由於我們的資產具有廣泛的吸引力，有時這意味著休閒，有時意味著直接的房地產、本地協商的業務。有時，這是為了管理我們的收入管理系統，以優化現有業務以及透過品牌管道或 OTA 實現的業務。我認為，我們所強調和驗證的是與我們合作的各個管理公司的實力、他們現場及以上物業員工的素質，以及坦率地說，我們的資產管理團隊與這些團體合作以在市場上取得絕對最佳結果的能力。

Next question is from Anthony Powell with Barclays.

下一個問題來自巴克萊銀行的安東尼·鮑威爾。

Similar line of questioning. So when you look at verticals like construction, manufacturing, project business, government. Is there any kind of temporary nature to any of this business? And is there any seasonality to the business? Would you expect this to be pretty durable across the fall and early winter? Or is there any part that may just go away in the winter?

類似的疑問。因此，當您查看建築、製造、專案業務、政府等垂直行業時。此類業務是否具有臨時性？業務有季節性嗎？您是否認為這款產品在整個秋季和初冬期間都相當耐用？或者有什麼部分可能會在冬天消失？

I don't know that we have perfect visibility. Like Justin mentioned at the beginning of the call, I think if the past few months have taught us anything it's that the current environment is not predictable. And I don't know that we can accurately give you an exact answer. But some of the business that we're picking up now, whether it be construction or manufacturing, it's business that's consistently in market, it just isn't business we have historically taken given the lower-rated nature of the business and being able to replace that or take higher-rated business transient and corporate negotiated as an alternative in better times. So I think the broad appeal of our assets affords us the opportunity to capitalize on business that is consistently or has consistently been in the market and is currently still in the market at this time.

我不知道我們的能見度是否完美。正如賈斯汀在通話開始時提到的那樣，我認為如果過去幾個月教會了我們什麼的話，那就是當前的環境是不可預測的。我不知道我們是否能夠準確地給你一個確切的答案。但是，我們現在接手的一些業務，無論是建築業還是製造業，都是一直存在於市場上的業務，只是由於這些業務的評級較低，我們過去不接手這些業務，因此我們能夠用這些業務來替代它們，或者在經濟形勢好轉時，暫時選擇與企業協商後評級較高的業務作為替代方案。因此，我認為我們資產的廣泛吸引力為我們提供了機會，讓我們能夠利用那些持續或曾經持續存在於市場中並且目前仍在市場中的業務。

And so I don't have perfect visibility into whether that will dissipate as we move through the coming months. As of right now, that has been a solid and stable piece of our business since we began recovering at the end of April and into May. So it's not something that's wavered. It's been a consistent theme as we talk with our management companies and our hotels as to what is making up the demand. It's not all leisure, our improvement in occupancy. As I mentioned, earlier, we're still growing some midweek. And in fact, we don't -- that could be leisure, but it also could be local negotiated accounts in some of this project business as well. And so when we speak to our management companies and hotels, it's -- we have a diverse set of demand generators even currently in our hotels. It's not only first responders or construction. And we certainly have some of that business, and it is helping us. And -- but I expect to the extent we fear that an increase in cases will pull back on leisure, an increase in cases will also maintain first responder business in our markets. And so there's an offset, to some extent, of -- and I think it's some of the reason that even as cases have increased, you've seen some stability in some of these markets where you would have expected a bigger pullback in demand.

因此，我無法完全預測這種趨勢是否會在未來幾個月內消散。截至目前，自 4 月底和 5 月開始復甦以來，這一直是我們業務中穩固的一部分。所以這不是什麼動搖的事。當我們與管理公司和飯店討論需求組成時，這一直是一個不變的主題。這不僅僅是休閒，我們的入住率也在提高。正如我之前提到的，我們在周中仍在不斷發展。事實上，我們不會——這可能是休閒，但也可能是某些專案業務中的本地協商帳戶。因此，當我們與管理公司和酒店交談時，我們發現，即使目前在我們的酒店中，我們也擁有多種多樣的需求產生器。不僅僅是急救人員或建築人員。我們確實有一些這樣的業務，而且它對我們有幫助。而且——但我預計，儘管我們擔心病例增加會導致休閒活動減少，但病例增加也將維持我們市場上的急救人員業務。因此，在某種程度上，這是一種抵消——我認為這也是為什麼即使病例增加，你仍會看到一些市場趨於穩定，而你原本預計這些市場的需求將出現更大幅度的回落。

And it's important to remember, we're in over 80 markets. And so the specific demand drivers for each market are distinct. And each market's more heavily reliant on a different industry. And the seasonality for our markets varies. So for example, leisure demand in Phoenix and in some of our Florida markets actually improves as we get into the winter months. And so I think it would be wrong to assume that as we get into the winter months, we would see a dramatic reduction in leisure across our entire portfolio, given the fact that we haven't even gotten into peak season yet for Phoenix and again, some of our Florida markets.

需要記住的是，我們的業務遍及 80 多個市場。因此，每個市場的具體需求驅動因素是不同的。每個市場都更依賴不同的產業。而且我們市場的季節性各不相同。例如，隨著冬季的到來，鳳凰城和佛羅裡達州部分市場的休閒需求實際上有所改善。因此，我認為，假設進入冬季後我們整個投資組合中的休閒活動會大幅減少是錯誤的，因為事實上我們甚至還沒有進入鳳凰城和部分佛羅裡達市場的旺季。

And it seems that, obviously, you've gained some share in some markets that you have taken some of this business that may have gone to other hotels. As those competitors either reopen or restaffed, do you think they may try to get the business back through discounting? And is that a risk? Or given kind of the quality of your hotels and your brands, do you expect to retain that business as competitors try to win it back?

顯然，你們在某些市場已經獲得了一些份額，搶走了一些原本屬於其他酒店的業務。當這些競爭對手重新開業或重新安排員工時，您認為他們會嘗試透過折扣來恢復業務嗎？這有風險嗎？或者考慮到您的酒店和品牌的質量，您是否希望在競爭對手試圖奪回業務時保留該業務？

I think that if competitors reopen, it will be because of -- they're reopening as demand is improving. And so that will be hopefully an offset to what will be more competitive. I think it's a real risk that as things open, things would be more competitive. However, as Justin mentioned, staying open and taking care of people when others couldn't or wouldn't and doing it well and having them be in-house and feel safe and have the increased sanitation protocols in place and just having been there, I think will afford us some stability as things reopen in certain markets. But competition is competition, and it may put pressure on rates or -- but we've heard from others in the industry that they're tending not to open until they see some stability in demand in market. And so I think hopefully, that will be an offset to some of the competition as things reopen.

我認為，如果競爭對手重新開業，那是因為——隨著需求的改善，他們重新開業。因此，希望這能夠抵消更激烈的競爭。我認為，隨著情況的開放，競爭將變得更加激烈，這是一個真正的風險。然而，正如賈斯汀所提到的，當其他人不能或不願營業時，我們保持營業並照顧員工，並且做得很好，讓他們待在店內並感到安全，並且實施了更嚴格的衛生規程，我認為隨著某些市場重新開放，這將為我們提供一些穩定性。但競爭就是競爭，它可能會對利率造成壓力，或者——但我們從業內其他人那裡聽說，他們傾向於在看到市場需求穩定之前不會開業。因此，我希望，隨著一切重新開始，這將會抵消一些競爭。

And remember, because of the locations that we're in, we didn't see closings from -- in order of magnitude, similar to our peers who are more heavily concentrated in urban markets where closures were significantly more pronounced.

請記住，由於我們所處的位置，我們沒有看到從數量級來看的關閉情況，類似於我們的同行，他們的公司更集中在城市市場，而城市市場的關閉情況則更加明顯。

Our next question comes from Tyler Batory with Janney Capital Markets.

我們的下一個問題來自 Janney Capital Markets 的 Tyler Batory。

This is Jonathan on for Tyler. First one for me. Can you just talk broadly about some of the trends you're seeing in regards to the extended-stay portion of your business and kind of how that compares to your select service assets?

這是喬納森 (Jonathan) 代替泰勒 (Tyler)。對我來說是第一個。您能否大致談談您所看到的有關長期住宿業務的一些趨勢，以及與您選擇的服務資產相比如何？

Absolutely. For us, similar to what we discussed on our Q1 call, we certainly are seeing our extended stay properties perform the strongest across our portfolio and brands. Some of that is consistent, even pre pandemic. I mean our extended stay properties have historically done well. They tend to be able to maximize RevPAR by building good long-term base business and maximizing rate potential on the remaining rooms. And so historically, we've seen strength there and now it's no different. And I think there's particularly -- particular appeal to them in an environment where restaurants have been closed and people need additional space and they have kitchens. We've run as much as a 20-point or $20 RevPAR premium in our higher-end extended stay brands. So we've certainly seen outperformance there.

絕對地。對我們來說，與我們在第一季電話會議上討論的情況類似，我們確實看到我們的長住酒店在我們的投資組合和品牌中表現最為強勁。其中一些是一致的，甚至在疫情之前也是如此。我的意思是，我們的長期住宿酒店歷來表現良好。他們往往能夠透過建立良好的長期基礎業務和最大限度地提高剩餘客房的房價潛力來最大化每間可用客房收入 (RevPAR)。從歷史上看，我們看到了那裡的實力，現在也是。我認為，在餐廳關門、人們需要額外空間和廚房的環境下，這對他們特別有吸引力。我們的高端長住品牌的 RevPAR 溢價高達 20 點或 20 美元。因此，我們確實看到了那裡的優異表現。

Okay. Great. That's very helpful. And then switching to the operations side in regards to the cost savings. How much of those savings do you think are permanent in nature? And how much do you expect them to creep back up as the hotels ramp on higher occupancy levels?

好的。偉大的。這非常有幫助。然後轉向營運方面來節省成本。您認為這些節省有多少是永久性的？隨著飯店入住率的提高，您預計這些費用會回升多少？

Well certainly, a portion of the expenses are variable and vary with occupancy. So a 67% year-over-year savings is unrealistic as we begin to see meaningfully higher occupancies in our hotels. That said, and we highlighted or Liz highlighted in her prepared remarks and [Chris] highlighted in his remarks yesterday, we are working with the brands in our capacity as representatives on various advisory boards and just given the long-standing relationship that we have within our executives at those brands to establish a model coming out of this, that's more profitable for us as investors. I think -- and still, importantly, still preserves the strong value proposition for our brands with consumers. And those conversations have been fruitful. And our expectation -- we've made meaningful adjustments to service levels and other aspects of our business as a result of the current environment that we're in, which is abnormal, hopefully, on a go-forward basis. But there have been learnings as part of that process. And our expectation is that we will take those learnings coming out of this to run better margins than we have historically.

當然，部分費用是可變的，並且隨著入住率而變化。因此，當我們開始看到飯店入住率明顯上升時，67% 的年比節省是不切實際的。話雖如此，正如我們或 Liz 在她準備好的演講中以及 [Chris] 在昨天的演講中強調的那樣，我們正在以各種顧問委員會代表的身份與這些品牌合作，並且鑑於我們與這些品牌的高管之間長期建立的關係，我們將建立一個模型，這對我們作為投資者來說更有利可圖。我認為——而且，重要的是，我們仍然為消費者保留了我們品牌的強大價值主張。這些對話富有成果。我們的預期是，由於目前所處的環境是不正常的，我們已經對服務水準和業務的其他方面做出了有意義的調整，希望從長遠來看是如此。但在這過程中我們也學到了很多。我們的期望是，我們將從中吸取教訓，實現比歷史上更好的利潤率。

Our next question is from Kyle Menges with B. Riley.

我們的下一個問題來自 B. Riley 的 Kyle Menges。

This is Kyle on for Bryan Maher. I was just hoping -- I was hoping if you could talk a little more on your thoughts around continuing to bring back hotel staff? And then was curious what wage levels you're seeing as you bring people back relative to levels pre-COVID?

這是 Kyle 代替 Bryan Maher 上場的。我只是希望—我希望您能再多談談您對繼續聘請飯店員工的想法嗎？然後我很好奇，當你把人們帶回來時，你看到的工資水平相對於新冠疫情之前的水平是什麼樣的？

So as I highlighted earlier, we're ramping employment at our hotels as we see occupancy improve. And a portion of a more significant portion of the employees that are coming back are hourly workers. And the use of their time varies with occupancy at the hotel. So the match is good there. With unemployment being significantly higher, wage pressure in individual markets is less than it was pre-pandemic with the caveat that, that's partially offset by the fact that there are very meaningful unemployment benefits available to people now. And so in some markets, where those are extremely high, there is pressure from a wage standpoint as we're looking to bring people back. But by and large, our expectation is that the primary pressure on wages for us historically was a result of low unemployment and availability of people to fill jobs. Unfortunately, we're not in that position now. And unemployment numbers are significantly higher and -- which puts us in a position to be selective, bring back the best talent, an environment that's much more competitive on their side.

正如我之前強調的那樣，隨著入住率的提高，我們正在增加飯店的就業機會。而回來的員工中，很大一部分都是計時工。他們的時間利用情況會隨著飯店的入住率而改變。所以比賽很精彩。由於失業率大幅上升，個別市場的工資壓力低於疫情前水平，但需要注意的是，現在人們可以獲得非常豐厚的失業救濟金，這在一定程度上抵消了這一影響。因此，在一些薪資水平極高的市場中，我們希望吸引人才回來，因此從薪資角度來看存在壓力。但總的來說，我們預計，歷史上我們面臨的主要工資壓力是由於低失業率和有足夠多的人來填補職位空缺。不幸的是，我們現在還沒有達到這個境地。失業人數明顯增高，這讓我們有選擇性地吸引最優秀的人才回來，為他們創造一個更具競爭力的環境。

(Operator Instructions) Our next question is from Michael Bellisario with Baird.

（操作員指示）我們的下一個問題來自貝爾德的邁克爾貝利薩裡奧。

Just the first question on the July trends. You gave a 45% occupancy level. But could you give us some more metrics around that? What was that versus last year? And what was the RevPAR percentage change for the portfolio in July?

第一個問題是關於七月的趨勢。您給出的入住率為 45%。但您能給我們一些有關這方面的更多指標嗎？與去年相比有何不同？七月投資組合的 RevPAR 百分比變動是多少？

RevPAR percentage change has slowed relative to the increases that we saw June over May and May over April. So it has -- RevPAR has slowed slightly. You can see that in the occupancy trend, too. ADR is very similar to what we saw in June, but has moderated. So similar trends.

與 6 月相對於 5 月、5 月相對於 4 月的成長相比，RevPAR 百分比變化有所放緩。事實上，RevPAR 略有放緩。您也可以從入住率趨勢中看到這一點。 ADR 與我們 6 月看到的情況非常相似，但有所緩和。趨勢如此相似。

And -- but what about on a year-over-year basis, the percentage change?

那麼 — — 但與去年同期相比，百分比變化如何？

The percentage change has moderated, but the absolute numbers are similar from an ADR perspective.

百分比變化有所緩和，但從 ADR 角度來看絕對數字是相似的。

Got it. And then just maybe back to some of your comments earlier on in the prepared remarks, just relative to your internal expectations that you had 60 or 90 days ago, and aside from the fact that occupancy was a little bit better and ticked up throughout the quarter, where were the positive surprises for you on the fundamental side?

知道了。然後也許回到您之前在準備好的發言中的一些評論，僅相對於您 60 或 90 天前的內部預期，除了入住率略有改善並且整個季度都有所上升之外，基本面方面還有哪些積極的驚喜給您？

I think the most positive surprise was that things ended up playing out very much as we anticipated they would. I think in our last call, we highlighted the fact that our expectation was that we would be profitable at the hotel level between 30% and 35% occupancy and at the corporate level between 40% and 45% occupancy. As business came back, we had a perfect opportunity to prove out those assumptions during the quarter. And those assumptions were -- or our expectations were met. I think we continue to be impressed, not surprised, but impressed with the ability of our management companies and our on-site teams to adjust and to operate incredibly efficiently and effectively in the current environment. These are, as I highlighted in my prepared remarks, unprecedented times, and we've been in the business for several decades now. And our management companies and our on-site teams have performed admirably. I think aided, obviously, by an asset management team who's been all over this, working with our management team to identify best practices and to establish norms such that we achieve optimal results on our properties.

我認為最令人驚訝的是事情最終的發展與我們的預期一致。我想在我們上次的電話會議中，我們強調了這樣一個事實：我們的預期是，當酒店入住率在 30% 到 35% 之間時，我們將實現盈利；當公司入住率在 40% 到 45% 之間時，我們將實現盈利。隨著業務的復甦，我們有絕佳的機會在本季證明這些假設。這些假設——或者說我們的期望得到了滿足。我認為，我們的管理公司和現場團隊在當前環境下進行調整併高效運作的能力讓我們印象深刻，雖然並不驚訝，但印象深刻。正如我在準備好的發言中所強調的那樣，這是一個前所未有的時代，我們從事這個行業已經有幾十年了。我們的管理公司和現場團隊表現出色。我認為，顯然，資產管理團隊在這方面提供了幫助，他們與我們的管理團隊合作，確定最佳實踐並建立規範，以便我們在我們的資產上取得最佳結果。

We have reached the end of the question-and-answer session. I will now turn the call over to Justin Knight for closing comments.

問答環節已結束。現在我將把電話交給賈斯汀奈特 (Justin Knight) 來做最後發言。

Thank you, and we really appreciate you taking the time to join us this morning on our call. These are unprecedented times, incredibly challenging. As I highlighted earlier, I'm incredibly pleased with the way our portfolio and our team has performed.

謝謝，我們非常感謝您今天上午抽出時間參加我們的電話會議。這是前所未有的時代，極具挑戰性。正如我之前強調的那樣，我對我們的投資組合和團隊的表現感到非常滿意。

We had going into this 3 priorities. First, to get back to a level where we could establish cash flow positive operation. Second, to look at our portfolio and to begin to explore opportunities to fine-tune in response to changing demand profiles of individual markets. And third, to leverage the strength of our portfolio to pursue opportunities in the future. I think we're executing incredibly well against that strategy, and I'm excited about what the future has in store for us at Apple. .

我們已經著手解決這三個優先事項。首先，回到能夠實現現金流為正的營運的水平。其次，審視我們的投資組合，並開始探索根據各個市場不斷變化的需求情況進行微調的機會。第三，利用我們投資組合的優勢來尋求未來的機會。我認為我們按照這項策略執行得非常好，我對蘋果的未來充滿期待。 。

Appreciate your interest in the company. And I hope that as you travel, and I hope that you travel, that you'll take opportunity to visit us and to stay in our hotels. Have a great one, and we look forward to talking to you soon.

感謝您對本公司的關注。我希望您在旅行時，也希望您在旅行時，能藉此機會參觀我們併入住我們的酒店。祝您一切順利，我們期待很快與您交談。

This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation and your interest in Apple Hospitality REIT. Thank you.

今天的會議到此結束。現在您可以斷開線路，我們感謝您的參與和對 Apple Hospitality REIT 的關注。謝謝。