So, when we look out from that standpoint and think about as we think about demand patterns and our guidance is we think 4% to 5.5%. I mean, we’re not seeing softening. You see pockets of it. Obviously, April is down for us. But again, we believe that’s our softest month of the year. You’ve got the holiday shift. You’ve got obviously slower group. You’ve got transient was less in April, but we see reacceleration as we look out in both May and June, and it’s pretty significant. And so, I think the worries, if you will, on the leisure front, I think, are a bit over — overdone. We were never going to trees don’t grow to the sky. And so when you saw the kind of growth that some of our peers had, those had to normalize. We didn’t see that because in some — in many respects, we don’t have that type of product.
But we’re seeing lift in — and we’re seeing it again. In the urban areas, we’re seeing it through the group. We’re seeing it broadening and embedded in that our leisure trips as well. A lot of people going to New York, not all are going for business. Many of those are also going for leisure as part of that trip.
Operator: Next question comes from the line of Bill Crow with Raymond James. Please go ahead.
Bill Crow: What are your peers expressed some caution over June. You did that — and I’m wondering, given the importance of leisure demand in that month and the important — importance of the month relative to the entire quarter, especially with the weak April, is June maybe the biggest pivot point on your ability to achieve guidance for the year? Is that really the month we need to kind of focus in on?
Tom Baltimore: Yes, it’s a great question, Bill. A couple of things. When you look at our kind of our mix, if you will. First quarter, we had obviously a group up about 15 — 15.4% as we reported. We’re trending at about 7% in second quarter and also tough comps. But if you think about third quarter, we’re probably 16% to 18%. So, third quarter is really strong for us. But as you unpack kind of May and June, we’re seeing RevPAR probably in the 5% to 6% range. And then, I gave some stats earlier where you’ve got Seattle and D.C., Boston, all high single digits or mid- to double digits in the case of Seattle. And then group pace for just May and June alone, I think it’s around 9%. So, to your point, that really gives us tailwinds and that reacceleration. So, that answers your question. April was sort of at the bottom of the barrel, if you will, for us as we sort of looked out and saw our demand patterns, but very encouraged as we look out.
Bill Crow: Yes, I appreciate that. A follow-up question, actually, for Sean, congratulations on the improvement in the balance sheet. I’m just curious, you’re at five to right now net debt to EBITDA. As you think of the CapEx projects, Tapa Tower that you want to build in Hawaii, everything else going on, is it likely that we’re going to be funding the additional capital with asset sales? Is that kind of the path that we’re still on at this point?
Sean Dell’Orto: I think that’s certainly part of it, Bill, near term as we certainly continue to explore that the non-core asset sales are more focused that way in redeploying that capital between the balance sheet and the ROI projects. So, I think that’s a fair assessment in the near term. Obviously, Tapa Tower, we’re working through to get the entitlements and everything else, and we’re still ways away from being shovels in the ground, but that’s, I think, for a future discussion as to kind of how we capitalize that.
Bill Crow: It sounds like any acquisitions are probably ways away at this point?
Tom Baltimore: Yes, Bill, Tom here. I would not say ways away. I just think as we look at the playing field, and I think the comment I made earlier, we think reinvesting in our portfolio where we can generate unlevered mid-teens returns investing in a great portfolio versus buying something at 15 times is really just — it’s a better way to create value for shareholders. We are focused on continuing to reshape the portfolio and sell non-core and reinvest, take that cash, pay down debt, reinvest back in the portfolio, buy back shares even it is also a better alternative than going out and buying assets. So, we continue to underwrite, look, Tom Morey and the team are — we’re underwriting, occasionally bidding, but it’s also got to make economic sense and it’s got to be accretive. We just don’t think that — and we’ve seen some of our peers do it and pay up for some of the luxury assets. And I can’t see one that’s worked out so well is my view, Bill.
Operator: Next question comes from the line of Dori Kesten with Wells Fargo. Please go ahead.
Dori Kesten: Is it fair to say the Phase 1 renovation tailwinds in Hawaii should offset the Phase 2 headwinds next year? And then, I guess, if we just put the two projects in aggregate, what’s the EBITDA growth that you’ve underwritten to stabilization?
Sean Dell’Orto: So, Dori, I would say the first part, yes, as we saw with Tapa Tower, we did a three-phase renovation. And as we’ve delivered the newly renovated rooms, we’re able to get a premium rate on that. So, as you think about Rainbow Tower, especially is the big driver rate, we’re obviously right there on the beach. It’s highly sought after. So — to start out with the Phase 1 and take some of the rooms off the line to renovate them, I think we’ll have a bigger disruption this year, then as we come through next year and have renovated rooms, we can charge a higher premium and then take the others offline. I think that kind of talks about what you’re thinking right now on that. I wouldn’t — I’m not at this point really to kind of looking to give any kind of pure EBITDA numbers to that.
I mean we talked about disruption being about $8 million for this — this renovation phase. Again, we probably expect that certainly to be less next year as I discussed. But as we kind of look to recover, I would certainly think that we’d be getting a premium. And I wouldn’t say that we underwrote any kind of ROI-type IRR, but we certainly expect a decent return on it just a rooms renovation.
Operator: Next question comes from the line of Jay Kornreich with Wedbush Securities. Please go ahead.
Jay Kornreich: I guess just one question for me. Just going back to the urban segment, which saw RevPAR improvement of 8% in the quarter, yet occupancy still sit 63%. I’m wondering, how do compared to, I guess, the first quarter of ‘19 for the comparable portfolio? And what are the goalposts you see for urban occupancy getting to as the year progresses? — but maybe also, is there any opportunity to see upside from pushing rate there as well?
