Chris Woronka: Okay. Fair enough. Just one quick last one is on the — I know you mentioned that the locally sourced, I think, business for Mexico is up 570 bps. Can you maybe compare — what does profitability look on that relative to — I know you’re still missing Canada, you’re still missing a little bit of Europe and more of Asia. So is there a way to just kind of bucket those in terms of their kind of contribution to however you look at it, whether it’s EBITDA or RevPAR?
Ryan Hymel: The best way to look at it is kind of as a percentage of the pie on room nights or revenue. We still remain very heavily North American-centric. Mexico traditionally has been kind of 8 to 10 percentage points of kind of room nights revenue-ish, US being a very large portion and then Canada. Canada and Asia were the two, up until recently that were still kind of behind. Canada had had its stops and starts and Asia was still only about 20%, 25% recovered. But Asia, pre-pandemic, was only about 4% of our overall pie. Canada, particularly, you heard us reference some of the increases in flights into all of our destinations. Canada is a large part of that across all of our destinations. They’ve got big pickup in the DR, in Mexico and Jamaica for Q4 and for Q1.
So I expect by the time we’re talking to you next year about Q4 results, Canada will be essentially fully recovered, if not better than, pre-pandemic levels, which is exciting. They’re a big piece of our overall business.
Chris Woronka: Okay, very helpful. Thanks, guys.
Ryan Hymel: Thanks, Chris.
Operator: The next question comes from Smedes Rose with Citi. Please go ahead.
Smedes Rose: Hi, thanks. I wanted to go back to the Jewell assets, which I think you had said are a drag of $15 million this year. I think you’ve been trying to sell them for close to a year now. So as you look out into ’24, and I think you had said that you think you can sell them, but if you cannot, I mean, is there a point where it’s better just to close them instead of diluting your shareholders so significantly? I mean, what’s the argument for keeping them open when they’re losing money?
Bruce Wardinski: Yeah. So I mean, first of all, and as we highlighted, Smedes, in our script, one of the big issues with the properties is kind of how we took them over. And so when that happened, from a timing perspective, we had really missed the European sales period. And the Dominican Republic relies very significantly on European customers. And they sell kind of a more traditional way than we do to our other segments, particularly to the US customers and even the Canadian customers. So it’s done well in advance through a lot of the traditional channels. And so we missed that. And particularly, that impacted kind of the summer into the third quarter. So really big into the second and third quarter. So I’ll let Ryan talk about how that goes forward.
But our focus, number one, is on selling the assets. As I just said to Chris, I feel confident we’re going to be able to. We will start lapping the bigger negatives, but we also have a better sales position with regards to Europe. And so I think that will benefit us.
Smedes Rose: I mean, I guess the question is for ’24, if you’re not able to sell them, can you at least get them to breakeven? Do you think you can get them to zero? Or…
Ryan Hymel: That’s what I was going to answer. So yeah, so the good news is all of those things that ailed us in ’23, you shouldn’t have. So one, just by design, they’re going to be open in the high season. We have a better chance of getting them to breakeven. And we spent a lot of time, particularly over the summer, actually building up a sales force in the Dominican, and we brought in a Vice President of Sales for the Dominican Republic who has deep ties to Europe. And just even having come a couple of weeks ago from our Board — excuse me, not our Board meeting, our budget meetings in the Dominican is a very, very large focus internally and in the sales and commercial organization on getting these back up to kind of closer to 2022 levels and others.
So I think we have a good chance of getting them to breakeven. And if not, they’re still significantly better than where they are today, and they’re far, far, far less of a drag. But you’re absolutely right, Smedes, the goal should not be to get them to breakeven, it’s to get them better than that.
Bruce Wardinski: That’s right.
Smedes Rose: I mean, it seems like the goal should be to close them if they can’t get to breakeven. I mean, I guess I don’t really get what’s the point of keeping them open if they’re losing money and…
Ryan Hymel: There’s other considerations on a sale process and other things you have to keep in mind. So you can’t look at them isolated in a vacuum.
Smedes Rose: All right. Thank you.
Ryan Hymel: Thanks.
Operator: The next question comes from Tyler Batory with Oppenheimer. Please go ahead.
Tyler Batory: Thank you. Good morning. So a follow-up question on the ADR growth. And specific to Q4, Ryan, you mentioned low-single-digits growth in year-over-year. I think last quarter you were talking about low single-digit to mid-single digit. So did that change there in terms of the outlook? And what are you seeing in terms of pricing around the holidays in Q4, in particular? I know it’s a little more of a peak period, probably elevated rates. Are you still expecting to see ADR growth during those periods?
Ryan Hymel: Yeah, for the festive periods, absolutely. That looks good. The shoulder periods are definitely more choppy. The Jewels have contributed to kind of that lower end of the original kind of guidance range for Q4. We did talk — to be specific, Tyler, I don’t think we ever gave Q4 specifically. We talked back half of the year. And so that’s where you’re getting the low to mid-single digit. And so I don’t think it’s changed too, too much from where we spoke last time. But on a reported basis, it should be up low single digits. But again, for all those reasons we discussed, there’s a lot of things working against us, including the aforementioned adjustments to Q2 ’22 or the fact that the two hurricane properties that we reopened in Q4 were opened at the highest ADR points of the fourth quarter.
There’s a big difference between ADRs in October than it is in December. So if you look at that on a clean underlying basis, our reported — our underlying ADR growth should be kind of low to mid-ish single digits. But again, you wouldn’t see it, that would be on an underlying basis.
Tyler Batory: Okay. Okay. Very good. And then do you think — when you look at your portfolio, and Bruce, I think you talked in Mexico that you think that you’re gaining market share. Does that comment extend to other regions in the portfolio? I mean, it might be tough to measure, but just trying to get a sense of whether you think you’re gaining market share, whether you think you’re growing faster than peers. I’m trying to get a sense, too, of just how impactful the Hyatt brands are in terms of your performance versus some of the competition that’s out there.
