Guidance Revision and Maui Impact
Q: What's driving the $47M guidance cut and Maui impact?
A: Sourav explained they reduced the midpoint of guidance by $64 million, with about 50% attributed to Maui and San Francisco. The remainder comes from markets like D.C., Orlando, Phoenix, and L.A. Maui's recovery is slower than expected, leading to a 180 basis point negative impact on portfolio RevPAR, up from 130 basis points previously cited. "

Second Half Guidance and Risks
Q: How derisked is your second-half guidance?
A: Sourav noted strong group booking pace for the second half, with Q3 group pace up high single digits. They derisked Q4 group forecasts around election weeks due to observed softness. Adjustments were made for the continued lack of short-term leisure pickup seen in Q2. "

Leisure Demand Trends
Q: Are leisure trends assumed flat in H2 guidance?
A: Sourav confirmed they applied Q2 leisure transient trends to the rest of the year, assuming flat ADR and slightly down occupancy for resorts in H2. The 300 basis point decline in guidance midpoint is evenly split between Q3 and Q4. " "

Economic Slowdown Indicators
Q: What lodging indicators reflect economic slowdown?
A: Jim stated that weaker weekend leisure at the lower end of the chain scale is the first indicator. He noted a bifurcation between the high-end consumer, still strong, and the low-end consumer. They believe current trends are temporary and expect the pendulum to swing back. "

Cost Management Amid Softness
Q: Can you reduce costs as revenue softens?
A: Sourav explained that variable costs move with volume and are managed asset by asset. There's no meaningful lag; by month-end, expense adjustments are reflected in results. "

Maui Recovery Efforts
Q: How are you stimulating demand in Maui?
A: Jim mentioned pursuing new channels like wholesalers and Costco Travel to bring customers back. They're collaborating with Hawaii's governor and Maui's mayor on a marketing campaign launching mid to late September to announce that Maui is open for business. Airlift into Maui is down 16% over 2019, so they're also advocating for increased airline capacity. "

Capital Allocation Plans
Q: Any plans for acquisitions or dispositions?
A: Jim expressed satisfaction with the three acquisitions made this year and stated they're not contemplating additional acquisitions in the near term. They've explored dispositions but find current pricing unattractive due to prohibitive debt costs. They're focused on integrating recent acquisitions and may consider buying back additional stock, with $742 million remaining on their repurchase program. " "

Ancillary Revenue Trends
Q: Are ancillary revenues holding up?
A: Jim reported that their affluent customer base is still spending. Food and beverage outlet revenue per occupied room is up 2% over last year and 1% over Q1. Excluding Maui, spa revenues are up 11% and golf revenues up 5%. Group banquet revenues are also up over the same time last year. "

Labor Cost Outlook for 2025
Q: How do you view wage increases for 2025?
A: Sourav expects wage and benefit increases to be lower next year, potentially in the 3% to 4% range or better, depending on inflation trends. Managers are currently working through budgets, and more clarity is expected by October or November. "