Sotherly Hotels Inc (SOHO) 2023 Q4 法說會逐字稿

Hello, everyone, and welcome to the Sotherly Hotels Fourth Quarter 2023 earnings call and webcast. My name is Sharon, and I'll be operating your call today. During this presentation, you can register to ask a question by pressing star, followed by one on your telephone keypad. I will now hand over to your host and Vice President of Operations.

大家好，歡迎來到索瑟利酒店 2023 年第四季財報電話會議和網路廣播。我叫莎倫，今天由我接聽您的電話。在演示過程中，您可以按星號，然後按電話鍵盤上的星號來註冊提問。現在我將把工作交給主持人兼營運副總裁。

Maxim's. Please go ahead.

馬克西姆的。請繼續。

Thank you and good morning, everyone. If you did not receive a copy of the earnings release, you may access it on our website at Sotherly Hotels.com. In the release, the Company has reconciled all non-GAAP financial measures to the most directly comparable GAAP measure in accordance with Reg G requirements. Any statements made during this conference call, which are not historical may constitute forward-looking statements. Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, we can give no assurance that these expectations will be attained. Factors and risks that could cause actual results to differ materially from those expressed or implied by forward-looking statements are detailed in today's press release and from time to time in the Company's filings with the SEC. The Company does not undertake a duty to update or revise any forward-looking statements.

謝謝大家，早安。如果您沒有收到收益發布的副本，您可以在我們的網站 Sotherly Hotels.com 上訪問它。在新聞稿中，本公司已根據 Reg G 要求將所有非 GAAP 財務指標與最直接可比較的 GAAP 指標進行了核對。本次電話會議期間發表的任何非歷史性聲明都可能構成前瞻性聲明。儘管我們認為任何前瞻性陳述中反映的預期都是基於合理的假設，但我們無法保證這些預期一定會實現。今天的新聞稿以及公司不時向美國證券交易委員會提交的文件中詳細介紹了可能導致實際結果與前瞻性陳述中明示或暗示的結果存在重大差異的因素和風險。本公司不承擔更新或修改任何前瞻性陳述的責任。

With that, I'll turn the call over to Scott.

這樣，我會將電話轉給史考特。

Thanks, Mac. Good morning, everyone. I'll start off today's call to review of our portfolio's key operating metrics for the quarter and for the year. Looking at the fourth quarter results for the same-store portfolio compared to 2022, RevPAR increased 3%, driven by a 4.1% increase in occupancy and a 1.2% decrease in ADR. For the full year, RevPAR increased 7% over 2022, driven by 3.8% increase in occupancy and a 3.2% increase in rates.

謝謝，麥克。大家，早安。我將在今天的電話會議上開始審查我們的投資組合本季和全年的關鍵營運指標。與 2022 年相比，第四季度同店組合的業績顯示，每間可用客房收入 (RevPAR) 增長了 3%，這主要得益於入住率增長 4.1% 和平均房價 (ADR) 下降 1.2%。全年可出租客房收入 (RevPAR) 較 2022 年增長 7%，其中入住率增長 3.8%，房價增長 3.2%。

Looking at the fourth quarter results for the same-store portfolio relative to 2019. Fourth quarter RevPAR was up 6.6%, driven by ADR growth of 17.7% and occupancy down 9.4% for the full year, RevPAR was up 5.5% over 2019, driven by a 17% increase in rate and a 9.8% decrease in occupancy. This occupancy gap reflects the significant upside for the portfolio moving forward.

看看同店投資組合相對於 2019 年第四季的表現。第四季每間可用房(RevPAR) 成長6.6%，受ADR 成長17.7% 和全年入住率下降9.4% 的推動，每間可用房(RevPAR) 較2019 年增長5.5%，主要是由於房價上漲17 %，入住率下降9.8%。這一入住率差距反映出投資組合未來的顯著上升空間。

Overall, our portfolio's fourth quarter top line results were generally in line with expectations. These results were characterized by occupancy growth, particularly in markets where the group segment makeup makes up a larger proportion of our revenue. Our hotels in Savannah and Wilmington, both of which possess large group components, continued to grow occupancy through substantial group bookings during the quarter. Certain leisure focused markets also experienced improved results during the quarter, highlighted by our Doubletree Hotel in South Florida, which saw significant bounce and occupancy of nearly 1,400 basis points during the quarter, contributing to year-over-year RevPAR growth of 22%. Despite the improvement in occupancy during the quarter, our portfolio's overall occupancy is still well below the comparable period in 2019, demonstrating their significant organic growth potential while showing steady improvement. Our urban markets generally have the most room for growth within our portfolio for example, although the Whitehall in Houston improved its occupancy more than 10% year over year, primarily through its meeting and banquet business, it has significant opportunity for growth, especially in the business transient and group segments. The Georgian Terrace, meanwhile, is showing positive signs of improvement due to significant impact of the writers and actors G and strikes last year on the hotel's film and production industry business management shifted its strategy towards growing group bookings. As a result of these efforts, the Hotel Group combined corporate association and social group business by 42% during 2023. Management's renewed focus on group bookings, coupled with the settlement of the actor strike, should dramatically improve. The Georgian Terrace has growth prospects moving forward.

整體而言，我們投資組合第四季的營收業績整體符合預期。這些結果的特點是入住率成長，特別是在集團部門構成占我們收入較大比例的市場。我們在薩凡納和威爾明頓的酒店均擁有大型團體酒店，本季透過大量團體預訂，入住率持續成長。某些以休閒為主的市場在本季度的業績也有所改善，其中以南佛羅裡達州的逸林酒店(Doubletree Hotel) 為代表，該酒店在本季度出現了大幅反彈，入住率增長了近1,400 個基點，使得每間客房收入較去年同期成長了22%。儘管本季入住率有所改善，但我們投資組合的整體入住率仍遠低於 2019 年同期，顯示出其顯著的有機成長潛力，同時呈現穩定改善。例如，我們的城市市場通常在我們的投資組合中具有最大的成長空間，儘管休士頓的白廳主要透過會議和宴會業務使入住率同比提高了10% 以上，但它仍然有很大的成長機會，特別是在業務瞬態和群體部分。與此同時，由於去年編劇和演員G以及罷工對酒店電影和製作行業的重大影響，喬治亞露台酒店正顯示出積極的改善跡象，業務管理層將其策略轉向增加團體預訂。透過這些努力，飯店集團在 2023 年將企業協會和社會團體業務合併了 42%。管理層重新關注團體預訂，再加上演員罷工的解決，情況應該會顯著改善。喬治亞露台的發展前景廣闊。

Looking at some highlights across the portfolio. The Hyatt Centric Arlington, driven by year-over-year growth in the group and corporate segments continued its exceptional performance during the fourth quarter. Group business, in particular has rapidly surpassed reached pre-pandemic levels, outperforming the fourth quarter of 2019 by 33%. Property outpaced prior year's RevPAR by 8%, driven by a 2% increase in occupancy and a 6% increase in room. The property, 6.7% RevPAR growth versus the comparable period in 2019 demonstrates this hotel's reach stabilization while the gap to pre-pandemic occupancy provides plenty of upside opportunity for this hotel moving forward, the property continued to be the leader in its competitive set, achieving a RevPAR index of over 124% for the quarter. Soda Savannah continued to outperform expectations during the fourth quarter, outpacing both prior year and pre-pandemic levels. Group business, which outpaced the comparable period in 2019 by 8% continues to fuel the hotel's strong results. Fourth quarter RevPAR outperformed prior year by 5.6% with strong occupancy growth. Meanwhile, the distillers RevPAR outpaced the comparable period in 2019 by more than 28%, fueled by significant rate growth of 25.9%. The property continues to improve its position among its competitive set, gaining 250 basis points in fair share during the quarter. Hotel Ballast in Wilmington, North Carolina, coupled strong group and leisure demand to record impressive results during the quarter, the property outpaced prior year RevPAR by 6.7%, fueled by 7.9% increase in occupancy compared to the fourth quarter in 2019, the property outpaced pre-pandemic RevPAR by 12.3%, fueled by 9.5% increase in rate and 2.5% increase in occupancy. The property street achieved strong results versus competitive set, achieving a 110.5% RevPAR index while gaining 340 basis points of share over prior year journey.

看看整個投資組合中的一些亮點。在集團和企業部門同比增長的推動下，阿靈頓凱悅中心酒店在第四季度繼續保持出色的業績。尤其是集團業務，已迅速超越疫情前的水平，較 2019 年第四季成長 33%。受入住率成長 2% 和房間數量增加 6% 的推動，房地產行業的 RevPAR 成長了 8%。該酒店的每間客房收入(RevPAR) 與2019 年同期相比增長了6.7%，這表明該酒店已達到穩定狀態，而與疫情前入住率的差距為該酒店的未來發展提供了充足的上升機會，該酒店繼續成為同類酒店的領先者，實現了本季 RevPAR 指數超過 124%。薩凡納蘇打水在第四季度的表現繼續超出預期，超過了去年和大流行前的水平。集團業務較 2019 年同期成長 8%，持續推動飯店取得強勁業績。第四季的 RevPAR 比去年同期高出 5.6%，入住率強勁成長。同時，在 25.9% 的大幅成長率推動下，酒廠的 RevPAR 比 2019 年同期成長了 28% 以上。該酒店繼續提高其在競爭中的地位，本季公平份額增加了 250 個基點。北卡羅來納州威爾明頓的Hotel Ballast 加上強勁的團體和休閒需求，在本季度取得了令人印象深刻的業績，該酒店的每間客房收入(RevPAR) 比上年同期增長了6.7%，推動入住率較2019 年第四季成長7.9%，該飯店的成長超過了去年同期受房價成長 9.5% 和入住率成長 2.5% 的推動，疫情爆發前的 RevPAR 成長了 12.3%。與競爭對手相比，房地產街取得了強勁的業績，實現了 110.5% 的 RevPAR 指數，同時比去年同期獲得了 340 個基點的份額。

Looking at profitability metrics for the portfolio, while hotel EBITDA margins for the fourth quarter 2023 were 430 basis points below prior year. There were 350 basis points above the comparable period in 2019. The fourth quarter of 2022 included several one-time benefits profitability that skews the year-over-year comparison. Stripping out these variations. Q4 hotel EBITDA margin declined a more modest 247 basis points over prior year. The increase in expense is attributed to increased property insurance costs as well as additional operating expense due to expansion of guest amenity and service levels. Which were not fully rolled out in Q4 2022, as well as increases in hourly wages over prior year. We view these amenity and service increases as necessary. Investments in our hotels, which allow us to remain competitive in our markets while maintaining strong rate growth moving forward, we expect margins to stabilize and we have we've reached a normalized staffing wage and amenity levels at our hotels and are also optimistic that the property insurance markets will begin trending more favorably in the near term.

從投資組合的獲利指標來看，2023 年第四季飯店 EBITDA 利潤率比去年同期低 430 個基點。較2019年同期高出350個基點。2022 年第四季包括多項一次性福利獲利能力，這導致年比比較出現偏差。剔除這些變更。第四季飯店 EBITDA 利潤率比去年同期下降了 247 個基點，幅度較小。費用增加的原因是財產保險費用增加以及由於賓客設施和服務水準擴大而產生的額外營運費用。這些措施尚未在 2022 年第四季全面推出，且時薪比前一年增加。我們認為這些便利設施和服務的增加是必要的。對酒店的投資使我們能夠在市場上保持競爭力，同時保持未來強勁的增長率，我們預計利潤率將穩定，我們的酒店已經達到正常的員工工資和便利設施水平，並且對財產保險市場在短期內將開始變得更加有利。

Turning to corporate activity, last month, we announced the Company executed a $35 million secured loan with Sealy City real estate funding collateralized by Hotel Alba in Tampa, Florida. The interest-only loan matures March 2029 and carries a fixed interest rate of 8.49%. Proceeds from the loan were used to repay the existing first mortgage and for general corporate purposes.

談到企業活動，上個月，我們宣佈公司以佛羅裡達州坦帕市阿爾巴酒店 (Hotel Alba) 抵押的 Sealy City 房地產資金執行了 3500 萬美元的擔保貸款。該只付利息貸款將於 2029 年 3 月到期，固定利率為 8.49%。貸款收益用於償還現有的第一筆抵押貸款和一般公司用途。

I will now turn the call over to Tony.

我現在將把電話轉給托尼。

Thank you, Scott. Reviewing performance for the period ended December 31st, 2023. For the quarter, total revenue was approximately $42.1 million representing an increase of 1.9% over the same quarter in the prior year. Year to date, total revenue was approximately $173.8 million, representing a 4.7% increase over full year 2022. Hotel EBITDA for the quarter was approximately $10.3 million, representing a decrease of 13.4% for the same quarter of 2022. Year to date, hotel EBITDA was approximately $44.8 million, representing only a decrease of 3.6% over full year 2022. For the quarter, adjusted FFO was approximately $2.8 million, representing a decrease of approximately $5.2 million from the same quarter last year. In that quarter, we experienced a $4.7 million gain related to partial forgiveness of one of the Company's PPP loans. Year to date, adjusted FFO was approximately $14.5 million, representing a decrease of $3.3 million over full year 2022. Please note that our adjusted FFO excludes charges related to the early extinguishment of debt gains and losses on derivative instruments charges related to aborted or abandoned securities offerings, softened stock compensation expense as well as other items. Hotel EBITDA excludes these charges as well as interest expense, interest income, corporate general and administrative expenses, the current portion of our income tax provision and other items as well. Please refer to our earnings release for additional detail.

謝謝你，斯科特。檢視截至 2023 年 12 月 31 日的業績。該季度總營收約 4,210 萬美元，比去年同期成長 1.9%。年初至今，總收入約 1.738 億美元，比 2022 年全年增長 4.7%。該季度飯店 EBITDA 約 1,030 萬美元，較 2022 年同季下降 13.4%。年初至今，飯店 EBITDA 約為 4,480 萬美元，僅比 2022 年全年下降 3.6%。本季調整後的 FFO 約為 280 萬美元，比去年同期減少約 520 萬美元。在該季度，我們因部分免除公司 PPP 貸款而獲得了 470 萬美元的收益。年初至今，調整後的 FFO 約為 1,450 萬美元，比 2022 年全年減少 330 萬美元。請注意，我們調整後的 FFO 不包括與提前消除債務損益相關的費用以及與中止或放棄的證券發行相關的衍生工具費用、軟化的股票補償費用以及其他項目。飯店 EBITDA 不包括這些費用以及利息支出、利息收入、公司一般和管理費用、所得稅撥備的當前部分以及其他項目。請參閱我們的收益發布以了解更多詳細資訊。

Looking at our balance sheet as of December 31st, the Company had total cash of approximately $26.2 million, consisting of unrestricted cash and cash equivalents of approximately $17.1 million, as well as approximately $9.1 million, which was reserved for real estate taxes, capital improvements and certain other items. At the end of the quarter, we had principal balances of approximately $318.9 million in outstanding debt at a weighted average interest rate of 5.42%. Approximately 83.4% of the Company's debt carried a fixed rate of interest after taking into account the Company's interest rate swap agreements. As we enter a more normalized operating environment, we anticipate the recurring capital expenditures for the replacements of furniture, fixtures and equipment to be more in line with historical norms. I'd estimate that those expenditures will amount to $7 million for calendar year 2024. We're providing guidance with a forecast of anticipated results for the full year 2024. Our guidance considers market conditions and accounts for current and expected performance within the portfolio. We're projecting total revenue in the range of $179 million to $182.6 million. And at the midpoint of the range, this represents a 4% increase over 2023. Hotel EBITDA is projected in the range of $46.1 million to $46.9 million. And at the midpoint of the range, this represents a 3.8% increase over 2023.

截至12 月31 日，公司的資產負債表顯示，公司現金總額約為2,620 萬美元，其中包括約1,710 萬美元的不受限制的現金和現金等價物，以及約910 萬美元，用於房地產稅、資本改善和投資。某些其他項目。截至本季末，我們的未償債務本金餘額約為 3.189 億美元，加權平均利率為 5.42%。考慮到公司的利率掉期協議後，公司約83.4%的債務採用固定利率。隨著我們進入更正常化的營運環境，我們預計用於更換家具、固定裝置和設備的經常性資本支出將更加符合歷史標準。我估計 2024 年這些支出將達到 700 萬美元。我們正在提供 2024 年全年預期結果預測的指導。我們的指導考慮了市場狀況並考慮了投資組合中當前和預期的表現。我們預計總收入在 1.79 億美元至 1.826 億美元之間。在該範圍的中點，這比 2023 年增長了 4%。酒店 EBITDA 預計在 4,610 萬美元至 4,690 萬美元之間。在該範圍的中點，這比 2023 年增長了 3.8%。

Lastly, adjusted FFO is projected in the range of $12.8 million to $13.8 million or $0.64 to $0.69 a share at the midpoint of the guidance. This represents an 8.7% decrease over 2023. The year-over-year decrease in adjusted FFO is mainly due to increased interest expense in 24 and one-time benefits for successful real estate tax appeals at our properties in Savannah and Hollywood in the comparable period 2023.

最後，調整後的 FFO 預計在 1,280 萬美元至 1,380 萬美元之間，即指導中點的每股 0.64 美元至 0.69 美元之間。這比 2023 年下降了 8.7%。調整後的 FFO 同比下降主要是由於 24 的利息支出增加以及 2023 年同期我們在薩凡納和好萊塢的房產成功進行房地產稅上訴的一次性福利。

And I'll now turn the call over to Dave.

我現在將把電話轉給戴夫。

Thank you, Tony, and good morning. Overall, we were very pleased with our portfolio's operating operations during the fourth quarter, capping off a productive year at the company, which achieved 7% RevPAR growth over prior year. Several of our properties, including Savannah, Wilmington and Tampa, continue to perform historically well during the quarter, characterized by strength in leisure and group demand, coupled with strong rates, although ADR growth has been the story of the recovery in the lodging industry. Since the pandemic, occupancy growth driven by the recovery in corporate and group travel was the driver of RevPAR growth during the quarter. We view this as an encouraging sign that traveler behavior is normalizing as we move further from the demand trends, which characterized the industry during the pandemic time. While year-over-year occupancy growth accelerated during the quarter, there's still plenty of opportunity to increase occupancy within our portfolio, which was still 630 basis points below 2019 occupancy levels during the fourth quarter. We believe both transient and group business travel will fuel this growth, especially at our hotels located in urban markets, such as Philadelphia, Atlanta and Houston, while facing persistent market related challenges, these hotels are making considerable headway in the corporate and group travel segments. The Georgian Terrace, for example, improved its production in the non film group segment during the year and should benefit from the recent settlement of the film industry strikes as film studios begin booking Extended Stay room blocks in the Atlanta market. It is also important to note that while performing historically well from a RevPAR standpoint, occupancy at the Hyatt Centric in Arlington was still 780 basis points below the comparable period in 2019. We believe this is this hotel still has substantial opportunities for growth as it continually surprises to the upside.

謝謝你，托尼，早安。總體而言，我們對第四季度投資組合的營運狀況感到非常滿意，為公司高效的一年畫上了圓滿的句號，每間可用客房收入比上年增長了 7%。我們的幾家酒店，包括薩凡納、威爾明頓和坦帕，在本季度繼續表現出歷史上的良好表現，其特點是休閒和團體需求強勁，加上強勁的房價，儘管平均房價增長是住宿業復甦的表現。自疫情爆發以來，企業和團體旅遊復甦推動的入住率成長是本季每間客房收入成長的推動力。我們認為這是一個令人鼓舞的跡象，表明隨著我們進一步遠離疫情期間該行業的需求趨勢，旅行者的行為正在正常化。儘管本季入住率年增率加速，但我們的投資組合仍有大量提高入住率的機會，第四季的入住率仍比 2019 年入住率水準低 630 個基點。我們相信，短期商務旅行和團體商務旅行都將推動這一增長，尤其是我們位於費城、亞特蘭大和休斯頓等城市市場的酒店，儘管面臨持續的市場相關挑戰，但這些酒店在企業和團體旅行領域取得了相當大的進展。例如，喬治亞露台 (Georgian Terrace) 年內提高了非電影集團細分市場的產量，並且隨著電影製片廠開始在亞特蘭大市場預訂長住客房，應會受益於最近電影業罷工的解決。還要注意的是，雖然從可出租客房收入的角度來看，歷史上表現良好，但阿靈頓 Hyatt Centric 酒店的入住率仍比 2019 年同期低 780 個基點。我們相信這家酒店仍然擁有巨大的成長機會，因為它不斷帶來驚喜。

Looking at our portfolio as group revenue picture, our full 2023, group revenue was 12% above 2022. Even with the strong gains, 2023 group revenue was still 10% below 2019, demonstrating there's still considerable considerable upside for the segment.

從我們的投資組合作為集團收入情況來看，我們 2023 年全年的集團收入比 2022 年增長 12%。即使成長強勁，2023 年集團營收仍比 2019 年低 10%，這表明該領域仍有相當大的上升空間。

The debt markets for the logic sector continue to present distinct challenges as stricter underwriting standards translate to higher hurdles for borrowers. We are closely monitoring the changing environment or being conservative in our approach as we address upcoming debt maturities in our portfolio. At the same time, we are being opportunistic in refinancing assets to drive additional liquidity to the Company for future needs.

邏輯產業的債務市場繼續面臨明顯的挑戰，因為更嚴格的承保標準意味著借款人面臨更高的障礙。我們正在密切關注不斷變化的環境，或在解決投資組合中即將到期的債務時採取保守的態度。同時，我們正在伺機進行資產再融資，為公司提供額外的流動性以滿足未來的需求。

Recently, we successfully refinanced the mortgage loan for our Tampa hotel in advance of the original the original maturity date, representing the culmination of our repositioning strategy, which created substantial value for the hotel and resulted in cash proceeds of over $10 million to the Company. As previously discussed, we have been diligently working with the lender in Philadelphia on refinancing options for the asset. We recently agreed to a nonbinding term sheet with the lender to further modify and extend mortgage for two additional years. We are proud of both of these recent refinancing events and the favorable outcomes, especially given the challenges in the current lending environment.

最近，我們在原定到期日之前成功為坦帕酒店的抵押貸款進行了再融資，這標誌著我們重新定位戰略的頂峰，該戰略為酒店創造了巨大的價值，並為公司帶來了超過1000 萬美元的現金收益。如前所述，我們一直在與費城的貸方就該資產的再融資方案進行努力合作。我們最近與貸方達成了一份不具約束力的條款清單，以進一步修改抵押貸款並將其延長兩年。我們對最近的這些再融資事件和有利的結果感到自豪，特別是考慮到當前貸款環境的挑戰。

Looking ahead, loan maturity schedule for our portfolio is spread evenly over the next several years with only one additional loan maturity in 2024.

展望未來，我們投資組合的貸款到期日將在未來幾年內均勻分佈，僅在 2024 年增加一筆貸款到期日。

Looking ahead to 2024, while there continue to be pockets of economic uncertainty. The threat of a major recession appears to be shrinking and lodging fundamentals have demonstrated continued resilience with additional growth anticipated in the near term. We anticipate urban hotels will outperform the total lodging market, led by corporate travel, which continues to trend positively.

展望 2024 年，經濟仍存在一些不確定性。嚴重衰退的威脅似乎正在減弱，住宿業基本面已表現出持續的彈性，預計短期內還會出現額外增長。我們預計，在商務旅行的帶動下，城市酒店的表現將優於整個住宿市場，而商務旅行的發展趨勢仍然積極。

Looking specifically at our hotel portfolio, Q1 2024 fours group revenues pacing 20% ahead of last year, while the full year booking pace is 14% ahead of last year. Overall, we are encouraged by the booking trends for our portfolio with full year 2024 RevPAR forecasted to range between 104% and 106% of full year 2023, right? We remain cautiously optimistic on the long-term growth prospects for our portfolio, which is well positioned to benefit from shifting traveler preferences towards unique product offerings, growth in corporate travel and continued strength in leisure travel. And with those comments. Operator, we can open the call up for questions.

具體來看我們的飯店組合，2024 年第一季四人團體營收比去年提早 20%，而全年預訂速度比去年提早 14%。總體而言，我們對我們的投資組合的預訂趨勢感到鼓舞，預計 2024 年全年 RevPAR 將達到 2023 年全年的 104% 至 106%，對嗎？我們對我們的投資組合的長期成長前景保持謹慎樂觀，該投資組合將受益於旅行者偏好向獨特產品的轉變、商務旅行的增長以及休閒旅行的持續強勁。以及這些評論。接線員，我們可以撥打電話詢問問題。

Thank you. Ladies and gentlemen, if you would like to ask a question, please press star one on your telephone keypad. That's star one on the telephone keypad. To withdraw your question star followed by two, and please also remember to unmute your microphone. One is your turn to speed. We do have our first question registered comes from Alexander Goldfarb from Piper Sandler. Alexander lifestyle is now open.

謝謝。女士們先生們，如果您想提問，請按電話鍵盤上的星號一。這是電話鍵盤上的一號星星。要撤回您的問題，請在星號後面加上兩個星號，並請記住取消麥克風靜音。一是輪到你加快速度了。我們確實收到了 Piper Sandler 的 Alexander Goldfarb 提出的第一個問題。亞歷山大生活方式現已開放。

Hey, good morning down there. Just a few questions. First, maybe going on the group travel, yes, I realize that not every company has a dedicated travel, yes, effort to coordinate some companies, people book their own travel on websites, et cetera, some bucket through their corporate travel department but what what are you guys doing to sort of drive more business to your hotels, especially since a lot of them are are our boutiques. They're not flagged. Clearly, that's a positive for leisure travel who are looking for that localized, you know, touch, but I'm thinking on a corporate level. It seems like a lot of people are brand-driven there. Mary out Hilton Hyatt type? And just trying to understand how you how you guys plan to to sort of drive more group within that sort of construct.

嘿，早安。只是幾個問題。首先，也許會進行團體旅行，是的，我意識到並不是每個公司都有專門的旅行，是的，努力協調一些公司，人們在網站上預訂自己的旅行等等，有些透過他們的公司旅行部門，但是什麼你們正在做什麼來為你們的酒店帶來更多的生意，特別是因為其中很多都是我們的精品店。他們沒有被標記。顯然，這對於尋求本地化觸感的休閒旅遊來說是積極的，但我是在企業層面上思考的。似乎很多人都是品牌驅動的。瑪麗不喜歡希爾頓凱悅酒店類型嗎？只是想了解你們計劃如何在這種結構中推動更多的團隊。

Hey, good morning, Alex. Scott of attempt to answer that question for you.

嘿，早上好，亞歷克斯。斯科特試圖為你回答這個問題。

So it really obviously is probably of property for us. As you know, from a from a individual business traveler perspective, we really don't have many properties that are highly reliant on individual business travel. Arlington is one that is highly reliant, and we've seen that come back really with a vengeance in the past years as you've seen through the metrics that we state today and in the release. So we've seen that come back very, very strong. And Philadelphia and Houston are two that have not seen VT. come back as quickly. So really, our focus is on group, which comes in a variety of different forms and is not as reliant on brand loyalty from a group perspective, we have a very robust group sales effort, both at the individual property and corporate levels, and we have third parties that also assist. We have a dedicated government group sales associates at the corporate level. So the robust group sales effort, something that we've grown over the past couple of years as we've added staffing back and repositioned and refocused on putting group into the hotel. So I'm not sure if that really answers your question, but that's that's really where we look to drive additional occupancy of the portfolio is really through our group sales effort.

因此，它顯然可能是我們的財產。如您所知，從個人商務旅客的角度來看，我們確實沒有太多高度依賴個人商務旅行的飯店。阿靈頓是一個高度依賴的城市，正如您透過我們今天聲明的指標和發布中看到的那樣，我們在過去幾年中看到了這種情況的嚴重回歸。所以我們看到它的回歸非常非常強勁。費城和休士頓是兩個沒有見過 VT 的地方。盡快回來。所以實際上，我們的重點是團體，它有各種不同的形式，從團體的角度來看，並不那麼依賴品牌忠誠度，我們在個人財產和公司層面都有非常強大的團體銷售工作，而且我們有第三方也提供協助。我們在公司層級擁有專門的政府集團銷售人員。因此，強勁的團體銷售工作是我們在過去幾年中不斷發展的，因為我們增加了人員配置，重新定位並重新專注於將團體納入酒店。所以我不確定這是否真的回答了你的問題，但這確實是我們希望透過我們的集團銷售努力來推動投資組合的額外入住率的地方。

And that's that's very critical at the independents, as you referenced. And we have exceptional group numbers that those independents.

正如您所提到的，這對獨立人士來說非常重要。我們的團體人數比那些獨立人士還要多。

That That's helpful, Scott. The next question is just looking at the balance sheet, you know, and the Alba, it looks like you increased the if I understood the commentary, it looks like you increased the loan about $10 million. You're sitting on $17 million of unrestricted cash and debt has been an issue for the Company. You know for I mean, since I've been covering you guys, what what are your thoughts on just paying down debt unencumbering, I mean I am not saying take cash to zero, but rather than increasing the mortgage balance on Alba, you take a lower balance and plan to pay that off, like it just seems like the Company needs to get out of this if all the assets are encumbered and start to focus on unencumbering driving free cash flow. So how are you guys thinking about that, especially as you're sitting on $17 million of unrestricted cash that's separate. And apart from the $9 million that's already allocated for various items?

這很有幫助，斯科特。下一個問題就是看看資產負債表，你知道，阿爾巴，看起來你增加瞭如果我理解評論的話，看起來你增加了大約 1000 萬美元的貸款。您擁有 1700 萬美元的不受限制的現金，而債務一直是公司的一個問題。你知道，我的意思是，既然我一直在報道你們，你們對償還債務無負擔有何想法，我的意思是我並不是說將現金歸零，而是不是增加阿爾巴的抵押貸款餘額，而是採取較低的餘額併計劃還清這筆資金，如果所有資產都受到阻礙，並開始專注於推動自由現金流，那麼公司似乎需要擺脫這種困境。那麼你們對此有何看法，尤其是當你們擁有 1700 萬美元的不受限制的獨立現金時。除了已經分配用於各種項目的 900 萬美元之外？

Yes, Alex, it's Dave know our debt picture. We look at holistically throughout the whole portfolio. So yes, we did take some cash out of Tampa, but that's because we created a lot of value in Tampa over our repositioning efforts. And I think you would have seen that if the pandemic hadn't occurred, we would have to exercise that value and taking that cash out of the property before this. But at the same time, we've got a debt picture globally in the commercial real estate industry that may actually require us to pay down some of the debt, as you mentioned, whether we want to or not. So the available cash we have on hand, it is a function of what we think may happen in the future. We want to be very conservative. And at the same time, as you recall, as our properties go through their multiple life cycle improvement processes, we have to take some cash out of the out of the box and maintain these assets. So we're just trying to be very conservative with our cash at look at each available asset and what we think the mortgage refinancing markets are going to look like, and we can't know that where they're going to be in six months or 12 months or 18 or 24 months. I agree that once the capital markets open, we might be able to take advantage of some additional capital opportunities. But right now, the capital markets for the public hotel rates are essentially closed or at least almost close. So we need to have a the public markets become more amenable to capital raising within the retail space. And then we can maybe make some decisions on that front. But I don't think it would be wise right now to take all of our available unrestricted cash and start paying down debt at least not in the near term.

是的，亞歷克斯，戴夫知道我們的債務狀況。我們全面審視整個投資組合。所以，是的，我們確實從坦帕拿走了一些現金，但那是因為我們透過重新定位的努力在坦帕創造了很多價值。我想你會看到，如果大流行沒有發生，我們就必須行使這一價值，並在此之前從房產中取出現金。但同時，我們已經了解了全球商業房地產行業的債務情況，正如您所提到的，無論我們是否願意，實際上可能需要我們償還部分債務。因此，我們手頭上可用的現金取決於我們認為未來可能發生的情況。我們想要非常保守。同時，正如您所記得的，隨著我們的房產經歷多個生命週期改進流程，我們必須從現成的現金中取出一些現金並維護這些資產。因此，我們只是試圖對我們的現金採取非常保守的態度，看看每項可用資產以及我們認為抵押貸款再融資市場將會是什麼樣子，我們無法知道六個月後它們會是什麼樣子。或12個月、18 或24 個月。我同意，一旦資本市場開放，我們也許能夠利用一些額外的資本機會。但目前，公共酒店價格的資本市場基本上已經關閉或至少接近關閉。因此，我們需要讓公共市場變得更適合零售領域的融資。然後我們也許可以在這方面做出一些決定。但我認為現在拿出我們所有可用的不受限制的現金並開始償還債務是不明智的，至少在短期內是如此。

And then I guess to that point, Dave, what do you estimate your free cash flow is for 2024? So I'm just trying to I mean, I understand defensively, you know, husbanding cash, especially given the intensive nature of hotels. But what do you figure your free cash flow is after debt service after normal?

然後我想，戴夫，您估計 2024 年的自由現金流是多少？所以我只是想，我的意思是，我理解是防禦性的，你知道，節約現金，特別是考慮到酒店的集約化性質。但是，您認為正常情況下還本付息後您的自由現金流是多少？

You're not the big R&M, but normal, you know, you have normal CapEx. What do you anticipate will have the free cash flow this year?

你不是大型 R&M，但很正常，你知道，你有正常的資本支出。您預計今年的自由現金流是什麼？

If you strip out if you strip out the nonrecurring CapEx. I think I have to ask Tony to kind of weigh in on a potential number there.

如果你剔除非經常性資本支出。我想我必須請托尼對那裡的潛在數字進行權衡。

I'd have to go back and double check my guess off the top of my head is probably $5 million to $6 million a year, but okay, I could be wrong either a back-end loaded. but a lot of it is going to depend on how these debt numbers flush out with respect to interest expense and principal amortization.

我必須回去仔細檢查我的猜測，每年可能是 500 萬到 600 萬美元，但是好吧，我可能是錯的，或者是後端加載的。但很大程度上取決於這些債務數字如何在利息支出和本金攤銷方面沖銷。

But a lot of it is going to depend on how these debt numbers flush out with respect to interest expense and principal amortization. I think of some of these debt refinancings where we're going to get some interest-only periods upfront where we're not going to have to spend a lot of cash on upfront principal amortization.

但很大程度上取決於這些債務數字如何在利息支出和本金攤銷方面沖銷。我認為在一些債務再融資中，我們將預先獲得一些只付息期，這樣我們就不必在前期本金攤銷上花費大量現金。

Have you said five business areas is that's inclusive of amort paydown or that's before.

您是否說過五個業務領域是包含分期付款的還是之前的。

And that's inclusive. But to your to your point, it's not inclusive of nonrecurring CapEx or one-time PIP expenditures, which you will have some some coming in the future here.

這是包容性的。但就您的觀點而言，它不包括非經常性資本支出或一次性 PIP 支出，您將來會在這裡遇到一些支出。

Okay. And then just a final question.

好的。然後是最後一個問題。

Just going back to the OpEx. I appreciate your time. It sounded like you guys are saying that in 2024 for insurance, you know, labor costs, our full year, basically restoration of the full amenities and an F&B, et cetera. Sounds like OpEx should be back to a normalized level. I don't know if that's yes, 3%, 4% growth but whatever. But is that the way we take that? And if it is back to a normalized level, sort of what is the new?

回到營運支出。我很感激你的時間。聽起來你們好像在說，到 2024 年，保險、勞動成本、我們全年的設施和餐飲等基本上恢復。聽起來營運支出應該回到正常水平。我不知道這是否是正確的，3%、4% 的成長，但無論如何。但這是我們採取的方式嗎？如果它回到正常水平，那麼新的是什麼？

Yes, the growth rate that we should expect in OpEx?

是的，我們應該預期營運支出的成長率是多少？

Well, I mean, operating expenses, I mean, it's been so volatile because of the insurance picture and the tax real estate tax picture. Those have been the big drivers. And then as Scott mentioned in his remarks, just getting the hotels back in sync with their amenity levels and service levels that are demanded by their asset chain scale designation that's that's created an abundance of operating expenses. But the theme for us is we're going to start normalizing all those where they should be normalized this year. And whether it's 4% or 5% or 3%. I'm not quite sure what the operating expense growth is. We could get back to you on that number. But normalizing back to pre-pandemic levels with margins is what we want to see. We've had a lot of rate growth, as you well know, but we've also had a lot of operating expense expense growth, specifically with respect to staffing and the cost of that staffing. And then the big outlier has been insurance and real estate taxes. And we're in the middle of our renewal right now. And I would say for the first time in a couple of years or three years, I'm somewhat less nervous about the insurance renewal as I think there's a lot excess capacity in the market and I think we're going to see at least some nominal growth in cost, but not the not the 50%, 70%, 100% premium increase that the industry saw in Pryor prior periods.

嗯，我的意思是，由於保險情況和房地產稅情況，營業費用非常不穩定。這些都是主要的推動因素。然後，正如斯科特在演講中提到的那樣，只要讓酒店恢復與其資產鏈規模指定所要求的設施水平和服務水平同步，就會產生大量的運營費用。但我們的主題是我們將開始使所有應該在今年正常化的地方正常化。無論是 4%、5% 還是 3%。我不太確定營運費用成長是多少。我們可以透過該號碼回覆您。但我們希望看到的是，利潤率恢復到疫情前的水準。如您所知，我們的費率成長很大，但我們的營運費用也有很大的成長，特別是在人員配置和人員配置成本方面。然後最大的異常是保險和房地產稅。我們現在正處於更新過程中。我想說，這是幾年或三年以來的第一次，我對保險續保不再那麼緊張，因為我認為市場上有很多過剩的產能，而且我認為我們至少會看到一些成本名義上成長，但不是產業在Pryor 前期看到的50%、70%、100% 的溢價成長。

Okay. Thanks. Thank you very much.

好的。謝謝。非常感謝。

Thanks, lot.

謝謝，很多。

Our next question comes from Brandon Boyd from who's a private investor branded line is now open.

我們的下一個問題來自布蘭登·博伊德（Brandon Boyd），他是私人投資者的品牌線現已開放。

Thank you for taking my question or would you speak to the payment of the deferred preferred stock dividends? And what do you foresee in that?

感謝您回答我的問題，或者您能談談遞延優先股股息的支付嗎？您對此有何預見？

Yes, sure.

是的，當然。

Good morning.

早安.

This is Scott speaking. We've seen on previous calls, anytime we've spoken the preferred deferred preferred dividends, certainly something that we striving to get repaid. We made one catch-up payments in calendar year 2023, and our lending what we stated previously is that our goal, absent additional capital raising executions will be repay that through ongoing operations.

這是斯科特在講話。我們在先前的電話會議中看到，每當我們談到優先遞延優先股股息時，我們肯定會努力獲得回報。我們在 2023 年進行了一筆追補付款，我們之前所說的貸款是我們的目標，如果沒有額外的融資執行，將透過持續營運來償還。

As kind of Dave's comments to Alex previously alluded to right now or our main focus on the uses of our capital and our capital allocation for the Company is going to be on how these debt refinancings unfold over the next year or two and how the debt markets behave. So that's a critical piece to the puzzle. We need to see how the debt markets, how they reopen and how they are underwriting behaves either either getting less restrictive and or interest rates coming down to help that, that that underwriting process and also the capital needs of our assets. So we needed to really put that at the forefront. And hopefully as that unfolds in a positive fashion, we can take a look at the preferred dividend, getting that cut back up further.

正如戴夫（Dave）之前對亞歷克斯（Alex）的評論所提到的那樣，我們對資本使用和公司資本分配的主要關注點將是這些債務再融資在未來一兩年如何展開以及債務市場如何表現。所以這是這個難題的關鍵部分。我們需要了解債務市場、它們如何重新開放以及它們的承銷行為如何，要么減少限制，要么利率下降，以幫助承銷流程以及我們資產的資本需求。所以我們需要真正把它放在第一位。希望隨著這種情況以積極的方式展開，我們可以看看優先股股息，進一步削減。

And would that mean that you do not anticipate an additional preferred dividend, an extra preferred dividend this year.

這是否意味著您預計今年不會額外派發優先股股息。

We can tell you when we prefer and what we are, what we consider a potential future payment. I mean, again, our goal is to get it repaid, but we need to really see how the debt markets and move in and move in our favor here in the short term. That's that's I think that's a critical focus for all commercial real estate companies right now. And as we get a better visibility on that, the better visibility on interest rates being reduced by the Fed will have a better understanding of what our free cash flow is and potential to repay and preferred dividends.

我們可以告訴您我們什麼時候願意、我們是什麼、我們認為未來潛在的付款是什麼。我的意思是，我們的目標是償還債務，但我們需要真正了解債務市場如何在短期內對我們有利。我認為這是目前所有商業房地產公司關注的重點。隨著我們對此有了更好的了解，對聯準會降低利率的了解也將更了解我們的自由現金流是什麼以及償還和優先股股息的潛力。

Okay. Thank you very much.

好的。非常感謝。

Thank you.

謝謝。

As a reminder, to ask a question, please press star one on your telephone keypad. Star one on your telephone keypad. We do not have any further questions, so I would like to hand the call back to Dave Folsom, Chief Executive Officer, for closing remarks. Dave, over to you.

提醒一下，要提問，請按電話鍵盤上的星號一。在電話鍵盤上加註星標。我們沒有任何進一步的問題，因此我想將電話轉交給執行長戴夫·福爾瑟姆 (Dave Folsom)，讓其發表結束語。戴夫，交給你了。

Thank you, operator, and thank you, everyone, for joining and listening in today and we look forward to speaking with everybody again on our next quarterly call.

謝謝接線員，也謝謝大家今天的加入和傾聽，我們期待在下一個季度電話會議中再次與大家交談。

Ladies and gentlemen, this concludes today's call. Thank you for joining. You may now disconnect your lines.

女士們、先生們，今天的電話會議到此結束。感謝您的加入。現在您可以斷開線路。