Gregory Miller

Gregory Miller asked about the strategic importance of Marine Products' regional dealer footprint, particularly its concentration in the Gulf Coast of Florida and the U.S. East Coast, given the current macroeconomy. He also inquired about the similarities and differences in manufacturing processes between MasterCraft and Marine Products plants.

Answer

Brad Nelson, Chief Executive Officer, affirmed that Marine Products' geographic presence is a significant strength, expanding MasterCraft's reach into coastal areas and under-tapped freshwater/saltwater opportunities. He noted this deal more than doubles MasterCraft's market reach to an upwards of $12 billion addressable market. Brad Nelson stated there are many similarities in manufacturing, especially given the comparable boat lengths. He highlighted opportunities to leverage best practices in materials, sourcing strategies, and partners, emphasizing that both companies have a history of operational excellence and the combination is 'strength on strength.'

Gregory Miller asked how the regional geography of Marine Products, with its heavy concentration in the Gulf Coast, Florida, and U.S. East Coast, influenced MasterCraft's decision-making in the current macroeconomy. He also inquired about the similarities and differences in the manufacturing processes between Marine Products and MasterCraft.

Answer

Brad Nelson, CEO, affirmed that Marine Products' geographic footprint is an added strength, expanding reach in coastal areas and complementing MasterCraft's inland market presence, effectively doubling their market reach to a $12 billion addressable market. Regarding manufacturing, he noted many similarities in boat lengths (small to mid-size) allowing for leveraged best practices, but also differences in materials, sourcing strategies, and vertical integration that present opportunities for shared learning and improvement. He emphasized that the combination is 'strength on strength.'

Gregory Miller of Truist Securities inquired about the performance of the recently converted Bankers Alley hotel in Nashville amid new market supply and asked for an assessment of the hotel transaction environment, including volume, pricing, and its relation to RLJ's NAV discount.

Answer

CEO Leslie Hale reported that the Nashville asset is performing very well, with a 14% RevPAR increase in Q2. COO Tom Bardenett attributed this success to its unique Tapestry Collection branding and location, noting 60% of business now comes from Hilton Honors members. Regarding transactions, Hale described market volume as low but noted that sentiment has improved recently, though equity capital remains scarce. She reiterated her belief that RLJ trades at a significant discount to its net asset value.

Gregory Miller asked about the impact of the recent Los Angeles fires on the Pierside Hotel and Zachari Dunes, and whether the company expects any related demand falloff later in the year.

Answer

President and CEO Leslie D. Hale and EVP and CFO Sean Mahoney confirmed their L.A. area hotels saw a positive, temporary demand lift from displaced individuals. Hale clarified that this incremental demand was not factored into their forward-looking guidance, as their budgets were built without this assumption.

Gregory Miller asked about demand and booking trends for The Knickerbocker hotel for New Year's as a read-through on leisure spending, and inquired about potential hurricane-related impacts on Florida leisure demand.

Answer

President and CEO Leslie D. Hale stated that leisure demand remains stable, with consumers being price-sensitive but still prioritizing travel, and noted The Knickerbocker is pacing well. COO Thomas Bardenett explained that Florida demand often shifts between coasts post-hurricane and that their portfolio is well-positioned with renovated assets to capture this demand.

Gregory Miller from Truist Securities asked for an update on summer leisure demand from international inbound travelers and how it is performing relative to expectations from a few months prior.

Answer

EVP & CFO Sourav Ghosh explained that the international inbound/outbound imbalance has largely 'washed out,' with moderating outbound travel offsetting still-depressed inbound levels. He noted that for Host's portfolio, international demand has been relatively strong in key markets like New York. President & CEO James Risoleo added that over 90% of Host's revenue is domestic, underscoring the portfolio's resilience.

Gregory Miller from Truist Securities inquired about the performance of summer leisure demand from international inbound travelers relative to expectations and which markets were most affected.

Answer

EVP & CFO Sourav Ghosh described the international travel dynamic as a 'net net sort of wash,' with moderating U.S. outbound travel being offset by softer inbound travel. For Host's portfolio, he noted demand has been relatively strong, with markets like New York performing well. President & CEO James Risoleo added that the New York Marriott Marquis's EBITDA is up 46% over its 2018 pre-renovation baseline, showing asset-level strength.

Gregory Miller of Truist Securities asked about the company's AI initiatives, specifically whether certain hotel types, such as larger or branded properties versus independents, are expected to see greater opportunities.

Answer

Co-President & CFO Raymond Martz explained that operationally complex properties like resorts may see the biggest benefits, as AI can handle high volumes of routine guest inquiries. Chairman & CEO Jon Bortz added that independent hotels might adopt AI more quickly due to their flexible third-party systems, whereas the legacy systems of major brands could lead to slower implementation.

Gregory Miller asked for the company's expectations for summer performance at its drive-to resorts and whether they anticipate positive RevPAR growth. He also questioned how the company prevents its cost-cutting efforts from negatively impacting guest satisfaction scores.

Answer

CEO Jon Bortz stated it was too early to forecast summer performance due to short leisure booking windows but noted that most resorts are well-positioned due to recent redevelopments. On guest satisfaction, he stressed that their focus is on operational efficiency, not cutting services that guests value. He affirmed that they constantly monitor guest reviews, which have been consistently rising, and would quickly reverse any change that negatively impacts the customer experience.

Gregory Miller of Truist Securities requested an update on the San Francisco market, asking about factors beyond the convention calendar, such as changes in local leadership, streetscape improvements, and tourism efforts.

Answer

Jon Bortz, Chairman and CEO, provided a very positive outlook, stating that San Francisco is improving 'in all regards.' He pointed to a more moderate city government, a business-friendly mayor, positive office absorption, and visible improvements in the city's cleanliness. He highlighted that the new head of SF Travel is already making a positive impact. Raymond Martz, Executive, supported this by noting that booking pace for their San Francisco hotels is up double-digits for each quarter of 2025.

Gregory Miller of Truist Securities requested an update on the Curator Hotel & Resort Collection's progress, including its hotel count and financial performance, and asked if KSL Capital Partners' sale of Davidson Hospitality Group would have any impact.

Answer

Jon Bortz, Chairman and CEO, noted that Curator's membership has held steady around 100 hotels, which is behind internal goals. Raymond Martz, Co-President and CIO, emphasized that Pebblebrook still benefits significantly from Curator's scale through better vendor contracts (e.g., Avendra) and access to new technologies like AI service bots. Regarding the Davidson sale, Bortz stated that they do not anticipate any impact on their relationship.

Gregory Miller asked if the company observed any weakness in consumer spending immediately following the formal announcement of tariffs or during recent periods of stock market volatility, and whether management was surprised by the lack of impact.

Answer

Executive Leonard Fluxman responded with a direct "No," stating there was no immediate impact on spending. He reasoned that guests already on a cruise have likely set their budgets and are not influenced by real-time news. Executive Stephen Lazarus added that this behavior is typical, as any change in spending habits would more likely occur after the vacation ends, not during it.

Gregory Miller from Truist Securities inquired if norovirus incidents had a material impact on the Q1 2025 outlook. He also requested more detail on the anticipated financial impact and quarterly cadence of ship dry docks for the year.

Answer

CFO Stephen Lazarus stated that norovirus incidents were 'not at all' impactful to the Q1 outlook. He began to address the dry dock question before the call experienced a technical difficulty, preventing a complete answer.

Gregory Miller questioned the revenue impact of cruise lines increasingly featuring their private islands on itineraries and asked what factors drive a cruise line's decision to add OneSpaWorld services to an already operational private island.

Answer

CEO Leonard Fluxman explained that while some private islands offer limited services, they are not a net negative to revenue and can become accretive as more spa offerings are developed. He stated that cruise lines decide to add or expand services on their islands based on direct passenger feedback and expressed demand for more amenities.

Gregory Miller asked about current trends in post-treatment product spending and the company's spa menu pricing strategy, specifically how it benchmarks against high-end U.S. resorts.

Answer

Executive Chairman Leonard Fluxman confirmed that both product and service demand remain strong, with retail attachment improving due to menu simplification. He explained that while OneSpaWorld benchmarks against land-based resorts, its pricing is still value-oriented, and the company sees potential for further price increases in 2025.

Inquired about the expected cash-on-cash returns for the CapEx at the Los Cabos resort and future projects. Also asked about the growth opportunities for the third-party management business, particularly with the Wyndham Alltra brand.

Answer

The CapEx for Los Cabos is primarily defensive to protect the asset's value and significant MICE business, so specific cash-on-cash returns were not provided. The Wyndham Alltra brand presents a significant opportunity in the third-party management space by targeting the large mid-market segment of all-inclusive resorts suitable for conversion.