Hawaii Performance and Japanese Travel Recovery
Q: Are you seeing upside in Hawaii despite challenges with Japanese tourism?
A: Yes. Even though revenue from Japanese travelers is only 3.5% compared to 18–20% pre-pandemic , our Hawaii properties are achieving near-record performance. We expect total EBITDA from our two Hawaii assets to approach $240–$250 million, possibly achieving a third record year. The gradual return of Japanese tourists—forecasted at 850,000–900,000 visitors this year—is a future tailwind.

Miami Renovation Plans
Q: What are your plans for the Miami property renovation?
A: We see a great opportunity to reimagine our iconic Miami asset, similar to our successful renovation of Casa Marina. We're investing in design and pre-development but significant spending won't occur until after 2024. We're excited about the potential upside and enhanced returns from this project.

Group Business Outlook
Q: Can you discuss expectations for group rates and ancillary revenues?
A: We continue to drive group rates higher, with rates up 11% over 2019 and projected to be up 14% for 2025. Out-of-room spend is robust; in Q1, banquet and catering revenues increased 11%. We anticipate sustaining this positive momentum in group business.

Asset Sales Strategy
Q: What is your plan regarding asset sales in the current market?
A: Despite market choppiness, we aim to achieve at least $100 million in asset sales this year. We'll use the proceeds to reinvest in our portfolio, reduce debt, or buy back shares. We've successfully sold assets under various conditions before and will remain disciplined.

CapEx Spending Outlook
Q: Should we expect elevated CapEx levels in the coming years?
A: Yes, we plan to spend $260–$280 million on CapEx, investing where we see significant upside, such as in Hawaii and Miami. This is higher than our historical average but reflects catch-up spending and strategic investments.

Leisure Demand Trends
Q: Are you concerned about softening leisure demand?
A: We believe concerns are overdone. Our upper-middle-class customer base remains resilient. We're not seeing significant softening; in fact, we expect RevPAR to increase 5–6% in May and June, with group pace up 9%.

Urban Market Recovery
Q: How is the recovery in urban markets like New York progressing?
A: New York RevPAR was up 30% in 2023 and 11% in Q1. With supply down 9% and tighter regulations on Airbnb, New York is more compelling today. We see urban recovery broadening across our portfolio.

Cost Controls and Margins
Q: Do you foresee any significant cost pressures this year?
A: We don't anticipate major unknowns. Potential upside exists from reinsurance renewals, and we're appealing real estate taxes. Labor costs are managed through strong union relationships, and we've built expected costs into our budget. We're confident in our cost controls.

Balance Sheet and Funding
Q: How will you fund your CapEx projects given debt levels?
A: We'll fund capital needs through asset sales, redeploying proceeds between the balance sheet and ROI projects. Our net debt to EBITDA is 5.2x, and we're focused on maintaining a strong balance sheet.

Occupancy and Rate Growth Potential
Q: Is there room to increase urban occupancy and rates further?
A: Yes. Overall occupancy is still about 500 basis points below 2019, indicating upside potential. We see opportunities to drive both occupancy and rate, especially in markets like New York.