RLJ Lodging Trust (NYSE:RLJ) Q3 2023 Earnings Call Transcript

Leslie Hale : Well, also don’t forget, August had — was impacted by hurricanes. It also was impacted by extreme hot weather in Texas and NOLA as well. So that’s embedded in August as well. And Chris, on your question on — in terms of the shoulders, can you restate that, so we can understand like what’s the nuance you’re focused on?

Chris Woronka : Yes, just the question would be, is that — do you think that’s an indication, does the broader weakness start with shoulder periods, right? So everybody is going to still travel for holidays, but do they — is it the weekend trip in early December that gets cut first.

Leslie Hale : Yes. We’re not really sort of seeing a degradation in our weekends. As I mentioned before, our weekends for our portfolio are up 4% over last year. Our weekends for our urban is up 4.6%. Keep in mind that we’re benefiting from what’s happening in large events, the concert sporting season is here, so we’re not seeing a degradation or waning. Thursday continues to be a check-in for us. We think that with the new backdrop around flexibility that the live, work, play environment is benefiting our portfolio. As Tom mentioned before, we’re seeing more growth on Monday, Tuesday, Wednesday because that’s where there’s a lot of room left to recover. But overall, we wouldn’t characterize as a shoulders as being weak or slowing down.

Sean Mahoney : And then the other thing to add, Chris, on your question around sort of the relative seasonality of the months, et cetera, that has not changed for the third quarter. September has always been an important month volume wise and was strong for us. In the fourth quarter, October is the big volume month, and that continues to be important. It’s roughly 40% of the top line and 50% of the bottom line for the entire quarter, which is sort of a — so from a relative seasonality importance for the month, that has not shifted.

Chris Woronka : Sean, and just a follow-up. I may have missed something earlier, but on insurance, I think you might have mentioned what the renewal period looks like. And is there any thoughts as to what that looks like next year. I think we’re all kind of constantly amazed at the pressure on insurance. And I guess, is there any hope of relief but more importantly, just where does that hit the year and when would that renew?

Sean Mahoney : Sure. I mean property insurance is a headwind for all real estate, including hotels. Our — we’ve had relatively favorable renewals over the last couple of years. We’re actually in the market today. We renew over the next week or so. And so I’m really not going to — I can’t and shouldn’t comment about anything on the renewal for this year. But I think that — I think your commentary around there being pressure on the overall insurance market is consistent with us. I think on a relative positioning, those that have — do not have significant claim history, and we are in that camp. We’ve screened very well from a claim history perspective or lack thereof. And so on balance, we expect to have more favorable renewal terms relative to the market, but still be a net headwind for everybody as the industry is seeing.

Operator: Our next question comes from the line of Austin Wurschmidt with KeyBanc.

Austin Wurschmidt : I wanted to hit on October. You guys highlighted RevPAR growth was up 6%. The largest contributor to the fourth quarter results. And I believe the midpoint of the fourth quarter RevPAR guidance range is in that mid to high 3% range. I know we’re late in the year and it’s a little bit difficult to forecast around the holidays, but curious if there’s anything you’re seeing in the pace figures over the next 30 to 60 days that cautions you and what it would take, I guess, for you to get comfortable or what it would take for you to get to the higher end of that range?