Raymond Martz: Yeah. And Mike, also just to remind again on the energy, property taxes, and property insurance. Those three items alone cause about 160 basis point impact to margins in a quarter, which was not — in fact, from last year that’s harder to forecast. That’s not related necessarily to hotel operations. So the good news is there’s less pressure on the labor side. So that’s less of a headwind there than it has been. But these three items that — these are items that were not in play last year. We didn’t have property insurance increases going up 50% to 60% last year. And then as John noted some of the unusual timing of property taxes and we know what’s going on in energy market. So those three items have a big component, if you look at our guide of down 100 basis points plus, it reflects 100 basis points headwinds for those three items.
Michael Bellisario: Helpful. Thank you.
Operator: Thank you. The next question is coming from Gregory Miller of Truist Securities. Please go ahead.
Gregory Miller: Thanks. Good morning. This question is about your 2W Hotels. As Marriott is nearing completion of the renovation in New York Sea and Square, and to my understanding, using the hotel as a flagship for the new direction of the brand. Do you anticipate any major operating changes or any forest renovations to your Boston or Los Angeles properties to meet new brand standards?
Jon Bortz: No.
Gregory Miller: Okay. I can’t argue with that. And then just since others are asking a second question, last one as well. This one is about so-called hidden fees. Have you noticed any changes to booking trends for hotels that are already presenting the total hotel charge early in the booking process relative to hotels and alternative accommodations in the same market that have yet to present total hotel charges?
Jon Bortz: That’s a really good question, Greg. And the answer is we haven’t seen anything anecdotally, it’s probably a better question for Marriott, since they’ve been the one who’ve completely switched over and have some time period now to do some data measurement to see whether they’re losing share or not. We’ve not seen it with our Marriott’s. But I can’t tell you we’ve dug into the detail into minutia to see if there’s been change in share within our Marriott properties, what might it be related to. So I mean, obviously, the whole industry is going to go there. We as an industry at the association level, which includes owners, operators and the brands are supporting legislation that does incorporate all charges interestingly, except government charges into the upfront rate, and that’s the way searches would occur, but that would apply across all kinds of lodging accommodations and that’s really been the focus of the industry to make sure it’s a level playing field.
I think we have — and the thing that we’ve seen, and I think it’s been helpful and we’ll really over — we’ll eliminate any long-term impact is the weather, you call it a destination fee or a resort fee or an urban amenity fee, it’s been adopted by most properties within the urban and resort markets. And certainly, the major cities have adopted it. So I don’t think from a competitive standpoint, ultimately, it’s going to make a difference. You know, by the nature of your question, certainly possible, it could make some minor difference in the near-term where there were not everybody is doing it. But I think in the short — in short order over the next 12 months, I think you’ll probably see it adopted everywhere. And it’s already required in California.
It will be required for next year, I forget whether when in the year kicks in, but I think it’s pretty early.
Gregory Miller: Yes. Yes, I was thinking about that one as well. I appreciate it, Jon.
Jon Bortz: Yes.
Operator: Thank you. Our final question today is coming from Chris Darling of Green Street. Please go ahead.
Chris Darling: Thanks. Good morning. Jon, going back to the discussion around dispositions, Boston and Washington, D.C. stand out to me as markets where you’ve kept your portfolio fairly intact since COVID at least. Maybe I’m reading too much into it, but just curious to understand how you’re thinking about the long-term prospects for those cities relative to some of the other urban markets where you’ve sold out of.
Jon Bortz: Yes. I mean, I think of those two markets, we probably feel better from a long-term perspective about Boston than we do about D.C. We just think will take — D.C. is more of the same — some of the same issues that the West Coast cities have whereas Boston for a number of reasons doesn’t really seem to have those in a significant way. We also — we like the fact that most people have gone back to work in Boston. And in D.C., for whatever reason the federal government can seem to get people to come back to the office. So it’s just going to take longer in D.C. I would also say our — the other way to think about it is, look, we have a pretty small position in D.C. today. We sold quite a number of properties when we bought LaSalle out of that market.
So — and we were never a big investor in D.C. at Pebblebrook. So we’re going to carry a much smaller position in D.C. in all likelihood anyway than what we carry in Boston, which, while maybe the number of properties are similar, the sizes are quite dramatically different as are the EBITDA numbers. So we’re big fans of Boston. We’re big fans of San Diego and L.A. We believe in San Francisco, but we’ve been reducing our position there. And there are some other markets, obviously, that we’ve been reducing our position
Chris Darling: Okay. That’s helpful. And then just one quick one, related to the entertainment strikes in Los Angeles. Historically, when you’ve seen those strikes come to an end, how quickly does business pick back up?
Jon Bortz: It depends on the time of year. So that there are quite a number of productions that are just — they would start the next day. The studios and the production companies have their plans in place. But the deeper we get into the fourth quarter, the entertainment industry tends to shut down a good bit between Thanksgiving and the second week in January, just through its culture. And so whether they buck that trend and do a lot more than they normally do to get things done or in the work so they can have a season in the spring next year. Not sure. I don’t have enough insight into that. But historically, they’re pretty anxious to get those productions going. It’s just if this runs much further and deeper into November, I’m not sure we’re going to see a whole lot get done in the last four to six weeks of the quarter.
