Anthony Powell: Okay. So, following up on that, most of your other peers have talked about May and June being a lot better than April, and your April was better than most of your peers. I’m curious what you view for the rest of the cadence for the rest of the quarter here?
Liz Perkins: As we look at average daily bookings and as we look at manager forecast and speak to the field, I think that, they remain encouraged for the quarter overall. April was promising and strong. I think, we believe that there’s incremental, there’s growth that we’ll see both in May and June as well, hopefully similarly to what we saw in April.
Anthony Powell: Okay. Thank you.
Justin Knight: Thank you.
Operator: [Operator Instructions] Our next question comes from Michael Bellisario with Baird. Please proceed with your question.
Michael Bellisario: Thanks. Good morning, everyone.
Liz Perkins: Good morning.
Justin Knight: Good morning.
Michael Bellisario: Okay. Just one more on the leisure commentary. The softer trend, did that come on the demand side or was it really related to some pricing sensitivity? And then, I know, Justin, you said big variances across markets, but any particular market that you can point to that were surprisingly weak?
Justin Knight: I don’t think the variances are within a fairly narrow band. And I would say, the occupancy and rate dynamic is somewhat related. I think, we’ve commented for some time that, pre-pandemic leisure was our most rate sensitive segment. And, we’ve been incredibly pleased and I think the entire industry has benefited from that segment being less price-sensitive. It has always been our thought that over time, we would revert towards more normal behavior with a greater ability to drive rate with our corporate customers as we achieved stronger occupancies midweek, and ability to drive rate with leisure customers around compression nights in markets where demand was strong. I think, we’re assessing what we’re seeing right now.
And as I highlighted, there is some variance from market-to-market. What we’ve seen overall is to the extent there has been a pullback in some markets on weekends from an occupancy standpoint. It’s been largely offset or more than wholly offset by a pickup in midweek business. And, that’s a trend we feel very comfortable with. When we look at overall profitability of our business and how we historically split business between business travelers and leisure, reversion to more normal behavior with stronger performance midweek would from an overall profitability standpoint be a favorable shift for us.
Liz Perkins: Yes, Mike, as Justin mentioned, when we look year-to-date at sort of the split between occupancy and rate, they’re closely aligned directionally.
Michael Bellisario: Helpful. And then, just switching gears on the DC transaction, could you quantify how much of the $10 million of trailing EBITDA comes from that rooftop retail space in the billboard? And then, also just any more color on the transaction process, the background, other bidders and selling motivation would be helpful? Thank you.
Liz Perkins: When we look at ACDC on a trailing basis, the rooftop and retail income is significantly more than our average portfolio. It’s closer to 20% of total revenue, with close to 80% coming from rooms.
Justin Knight: And then, from a background standpoint, this was a group, a strong developer, multi-market developer that has investments across segments of real estate. And, I think we’re struggling a bit in an unrelated office portfolio. And, I think, saw an opportunity to gain some incremental liquidity through the sale of this asset. This was an asset that was built by the group to be held long-term. And, I think if you have an opportunity to visit it, you’ll recognize that in the quality of construction and the premier location. And, I think, we were fortunate as we have been in several instances to be the right group at the right time and purchase the asset at a price that we believe, we already feel very good about, but we feel will look even better as we move into the future.
Michael Bellisario: Got it. And then, just one clarification was just 20% of total revenues, presumably at the 100% margin, so a much higher percentage of EBITDA. Is that a correct assumption?
Justin Knight: It’s not a 100% margin. The restaurant is managed, so it would be near a 100% margin for the other outlets. But, the restaurant is managed by a third-party and so there are expenses associated with that.
Michael Bellisario: Got it. Helpful. Thanks.
Operator: [Operator Instructions] Our next question comes from Tyler Batory with Oppenheimer. Please proceed with your question.
Unidentified Analyst: Good morning. This is Jonathan on for Tyler. Thanks for taking my questions. First one for me, just a follow-up on that leisure demand discussion, more clarification questions. Can you remind us how you define leisure demand? Is that commentary interchangeable with weekend occupancy?
Justin Knight: There is close alignment when we look at it to weekend occupancy, not exclusively. We also look at negotiated accounts separate and apart from that. But, when you look at our hotels outside of a few markets where the majority of our business, regardless of when it occurs during the week, tends to be leisure. Most of our hotels skew heavily towards leisure on the weekends and towards business travel midweek.
Unidentified Analyst: Okay, helpful. Thank you for that. And then Liz, helpful commentary on the labor side. Can you talk about the other cost inflation in the business and what areas of the expenses are seeing kind of the greatest year-over-year growth outside of labor?
Liz Perkins: We were pleased with the first quarter overall. If you look at comparable results, the team did a reasonably good job with costs outside of labor and including labor. We saw a deceleration in labor expenses or total cost per occupied room from a payroll perspective in Q1 relative to Q4. And really as we looked at guidance in the midpoint, we were right in-line on the topline slightly ahead on the bottom line. And, we took that into account to some extent about $1 million with the change in the guidance range. It was really broad-based, where we saw some deceleration. Utilities were down, a lot of the overhead departments decelerated their increases relative to Q4. And so, it’s really broad-based. We’re pleased to see overall the impact of the efforts that our teams have put in place and the stabilization in the cost environment.
Unidentified Analyst: Okay. Great. Appreciate the color there, Liz. And then, last one from me if I could, Justin on the acquisition in DC you talked about the favorable market dynamics and how you wanted to have a presence in that market for some time, I think the release said. Are there any other markets that you’d still like to expand to? And, maybe can you rank over the criteria you look for in new markets?
