And it’s very different, right. If you’re an urban hotel or a business transient hotel versus a leisure resort, both have their complicating factors. Urban grew business transient. You’re like, okay, when does that business come back? How strong is that business going to be? What’s the impact of office occupancy, rates and cities? All of that. So that affects it. Even on resorts, it’s a little different because they’ve been doing really well over the last couple of years. But then the question is, how long is that sustainable? Are the rates sustainable? What happens when people have to fully staff and add back all the services that they’d cut? We never cut our services, okay. So, we don’t have that issue. That issue exists in the U.S. So, for those reasons, I think selling in the U.S. is a little harder.
The other big one, okay, the real big one is debt, debt financing and interest rates. And obviously, as interest rates go up, it makes the hurdle go up for any buyer of a hotel, so they’re going to want a lower price in order to meet their hurdle. Well, if you look at our segment, as I mentioned, most people in our segment are doing well. The other thing unique about our segment is many of the players with either big family-owned companies, they don’t have a lot of debt, and they don’t necessarily need any debt to acquire these assets. So, they could just buy them and then rebrand them into their brands. They’re already in markets where they are currently existing. So, the ability to transact is really easy. The DR as a market is doing incredibly well, and they have been hitting month after month, quarter after quarter, record number of guests visiting the country.
So, I think when you look at the attractiveness of these two resorts to a wide variety of potential buyers, I think they’re incredibly attractive. And so, I don’t envision we’re going to have a huge amount of difficulty selling them at a good price for Playa.
Smedes Rose: Is there any kind of range you can provide on what you think gross proceeds would be?
Bruce Wardinski: No, not at this time.
Ryan Hymel: Yes, it’s going to depend on the buyer, their structure and things like that and their duration. It really varies by buyer in our markets.
Smedes Rose: Okay. All right, thank you, guys.
Bruce Wardinski: Great. Thanks, Smedes.
Operator: Our next question comes from Tyler Batory from Oppenheimer. Please go ahead with your question.
Tyler Batory: Hey, good morning. Thank you. A couple of quick follow-ups on the guidance. So, the full year EBITDA range that you gave, what’s the expectation in terms of the total drag from the Jewel properties…
Ryan Hymel: Assuming they were with us for the full year, about $13 million.
Tyler Batory: Okay. And then, the comment, margin expansion year-over-year, was that meant to exclude those assets?
Ryan Hymel: No. So, for the full year, we should still be able to have margin expansion even with that drag. The first quarter, my expectation is that for a total portfolio, the margins would potentially be flat to slightly down. But if you excluded those Jewels, it would be up. But beginning in Q2 and beyond, again, assuming they remain with us for the full year, we should be able to lap last year’s margins.
