So both of those assets are in great shape and we’re confident that over time as the consumer begins to understand the differentiation between Wailea, which is a completely different submarket than the west side in Kaanapali, that will see the cadence of business pick up. And I would just say that, as we think about the midpoint of our guidance this year, we’ve assumed pretty much 100 basis point impact on Maui and that will result in about the same diminution in EBITDA as we experienced last year. But if Maui is better than our anticipation, and it’s too soon to really know that, then we think there is some upside and that takes us to the higher end of the EBITDA guide.
Sourav Ghosh: Yes, I just want to make sure I explain the EBITDA piece for Maui. To be clear, obviously when you look at sort of the first half, it’s going to be impacted by the wildfire. That’s about a $25 million to $30 million incremental impact for 2024. So when you think about the total impact for the year, it’s close to $50 million that the wildfire impact is actually having as a result of Maui. So just keep that in mind, it’s $25 million incremental impact year-over-year, $25 million to $30 million.
Aryeh Klein: Thank you.
Operator: Thank you. Your next question is coming from David Katz from Jefferies. Your line is live.
David Katz: Morning everybody. Thanks for working me in. I appreciate it. Covered a lot of ground already and I really wanted to just maybe triple click on how we think about the boundaries for deals more. Are fixer uppers in or out of bounds versus things that just need a little more strategic direction. And any thoughts on sort of size would be helpful there as well. And that’s it for me.
Jim Risoleo: Well, David, let me take the second part of your question first, because that’s an easy one. Bigger is better for us. And we don’t turn any attractive opportunity away. But obviously, given our scale and our ability to deploy capital, we focus on larger transactions, we focus on complicated transactions, complicated boxes with diverse demand generators being group business transient and leisure, as well as hotels that have multiple outlets and look for opportunities to not only improve the top line, but to improve the middle part of that P&L through our asset management and enterprise analytics capabilities. We are perfectly open minded to buying an asset that needs to be repositioned from a CapEx perspective, it doesn’t concern us at all.
We certainly have the ability with our design and construction group in house to do that. But what we really look at is how is this asset going to perform after it is renovated and repositioned, and how is it going to perform relative to the existing portfolio, because our bottom line goal is to put money to work, whether it’s within our existing assets or new acquisitions to elevate the EBITDA growth profile of the company. So it’s across the board.
David Katz: Thank you very much.
Operator: Thank you. Your next question is coming from Dori Kesten from Wells Fargo. Your line is live.
Dori Kesten: Thanks. Good morning. How has the spread between your group and transient ADR shifted from 2019 to today? And I guess, how much do your transient rates drive your in the year, for the year group booking pricing.
Jim Risoleo: Sorry, Dori, can you repeat the question for me?
Dori Kesten: The spread between your group rates and your transient rates. I’m wondering how that’s changed from 2019 to today. And then the second piece of it was how much do your transient rates inform your in the year for the year group pricing?
Jim Risoleo: Yes, so its typically so answer the second half first, I’ll have to get back to you on the specific delta to 2019 on group and transient, don’t have that in front of me. But in terms of the way we think about the yielding, it really is group comes first. So you’re developing that group base and you’re seeing where that group rate is, and then you’re yielding the transient business and depending on where group is coming in, and it’s not just a rate piece, you have to remember, it’s also we get a meaningful amount of ancillary business with food and beverage and golf and spa and all that. That makes up a pretty meaningful amount for our portfolio. It is looking at total revenue and what that contribution is to total EBITDA.
So once a group base is built, then we figure out the properties are looking at, okay, what makes most sense to layer in transient and at what rate. So you’re going to yield out the lower rated business and obviously move towards the higher rated business. So it’s more the group base that drives it versus just where transient is coming in. I mean, so you’re looking at transient pickup, certainly in the short-term, and filling that up. But the pricing is all determined where group sits for majority of your portfolio.
Operator: Certainly, there are no further questions in the queue. I’ll now hand the conference back to Jim for closing remarks. Please go ahead.
Jim Risoleo: Thank you. And thank you all for joining us today. We appreciate the opportunity to discuss our quarterly results and our guidance for 2024, and we look forward to seeing many of you at conferences in the coming months. Have a great day.
Operator: Thank you, everyone. This concludes today’s event. You may disconnect at this time and have a wonderful day. Thank you for your participation.
