We are starting to see that bleed into Monday nights to some extent, in particular in the first quarter. And so I think, look, the trends are coming off of obviously a lower baseline from a BT perspective, midweek and an urban perspective, but that is where we continue to see the vast majority of our growth. I do expect that to continue at least through the second quarter and likely through the balance of the year, as I mentioned. Our pace stats look very, very strong, particularly in May, but really, as we even look out into June, into the full second quarter, I will say that our pace statistics are better midweek than they are on the weekends, but they’re still positive on the weekends and rates are still positive year-over-year from a pace perspective.
Bill Crow: So do you see any weakening from the consumer front on weekends? I mean, you said the pace is better during the weekday, but is there real — should there be real concerns about the consumer maybe changing spending habits?
Jon Stanner: I don’t think we’ve seen a whole lot of evidence to suggest that people are cutting back on leisure travel. I think a lot of the rate, what we describe as rate softness has every bit as much to do with how strong rates have been in 2022, in the first quarter of 2023. And I do think you’ll see some of that normalization play out over the summer. I know there’s a lot of concern around general consumer spending. I know we’ve all seen the performance of kind of the lower end of the chain scales in the industry. We just haven’t seen that really play out in our markets. To the extent that we’ve seen softness, it’s been more rate oriented, and I think it’s been more oriented in our ski markets where we just didn’t have the same strength of a snow season as we did last year.
I don’t think we’re going to have the same ability to drive these enormous rate gains that we saw particularly in 2022, but the pace data, again, looks, looks stable. We’ve tried to be forward leaning on this, knowing that in some of these markets we’ll try to build some level of group-based demand in these assets to help drive incremental pricing on the retail customer.
Bill Crow: Great. I’m going to apologize because I’m going to ask one more question here. On the asset sales, I’m curious whether you’re marketing any additional assets for sale and how you’re thinking about balancing the sale of properties that are in the wholly-owned portfolio versus those that are in the GIC portfolio? And that’s it for me. Thanks.
Jon Stanner: Yeah, thanks, Bill. I would say we’ve tried to be very opportunistic, as I said to Austin, around assets sales. We’ve targeted assets that have been lower RevPAR assets, those assets that had larger CapEx needs that we could sell most efficiently in a market where, as I said earlier, it’s still difficult to sell bigger, chunkier type of assets; New Orleans was the exception to that. I would say that we’ll continue to be thoughtful and opportunistic around asset sales. We’d like to continue to do it in a similar way that we’ve done it before, where it’s very targeted, it’s very focused on finding, oftentimes the local owner operator that’s willing to pay a little bit extra that may price things on a per pound or a per key basis and it was a little less focused on in place NOI.
And so there have been a few asset sales. We’ve sold a couple of assets out of the GIC venture. Both of those assets were assets that were part of the NCI transaction that we identified when we did the transaction as being non long term, holds non-core assets that we were going to try to sell prior to doing a renovation. And so if there’s been one kind of consistent theme to what we sold, it’s been assets that we’re ultimately going to need a fairly large capital infusion from a renovation perspective, where we just felt like our capital was better deployed elsewhere. And I would expect that to continue to be a large driver of our capital allocation thesis going forward.
Bill Crow: Great. Thank you.
Operator: Thank you. Our next question or comment comes from the line of Chris Woronka from Deutsche Bank. Mr. Woronka, your line is now open.
Chris Woronka: Okay, thanks. Hey, good morning, guys. I jumped on a little late, so apologize if there’s any repeat question. I guess the first topic was kind of on costs and really on labor. We read headlines, I think yesterday there were some actions in some cities. How much visibility do you guys think you have on costs, really on labor, as you look out for the balance of the year? And as you look back in the first quarter or even last year, were there any intra quarter, intra year surprises, whether it was market specific, where you have to bring wages up or something like that? Any comments you can give us on your outlook for that? Thanks.
Trey Conkling: Hey, Chris, it’s Trey. I guess what I’ll do is I’ll comment a little bit on the trends that we’ve seen in the expense profile of the business as we’ve kind of gone through the past half a year. If you look to the second half of last year, I think our operating expenses were up 4% in the third quarter and the fourth quarter. If you look at that on a cost per occupied room, they were up kind of 1.5%. If you. If you fast forward to the first quarter here, operating expenses were up about 2.5% and cost per occupied room were down 1.6%. The first quarter represented the sixth consecutive quarter of cost per occupied room declining, or, I’m sorry, on contract labor declining and contract labor, I think, is the biggest variable that we’ve seen in how our expenses are evolving as we’re going forward here.
And so continuing to have progress on the contract labor front is something that we’ve seen and something that we hope will persist through the balance of the year. I think the thing that’s not talked about quite as much is turnover in the business. And I would say that turnover in the last year, if you look to kind of 2022, 2023 was probably two times as high as it was pre-pandemic. And now turnover this quarter versus the previous first quarter of 2023 was down about 20%. So to the extent that turnover continues to moderate, that is significantly beneficial to us, both from a training cost perspective and from overall productivity. So looking out, we don’t have the longest term view as a select service portfolio, but I think that the trends that we’ve seen over the last three to four quarters are fairly encouraging.
