Jon Stanner: Yes. Look, the first thing I would say is it’s – we are early, we are still going through the budget process right now. So, to say that we have got perfect sidelines into that at this time of the year would be a little premature. I do think as I just alluded to, I do think you will see above inflationary growth in insurance costs again next year. I would just remind everybody that’s roughly 5% of our total cost base. So thankfully, it’s not the biggest driver of our overall cost. We have seen the biggest driver of overall cost, as you would expect, is on the labor side. We have seen wages moderate significantly this year. I think our wages are up about 2% year-to-date versus where they were last year. That’s been very encouraging.
It’s what helped drive what was really, really strong margin performance in the quarter. When you look at essentially flat operating margins on plus or minus 2.5% RevPAR growth and less than 1% expense growth per occupied room, you are seeing really, really strong control. So, I do think wages generally have stabilized. I think the expense growth outlook for 2024 is much better and much cleaner than it was when we looked at ‘23. And again, you saw that in the transition from the second quarter to the third quarter, where we had significant expense growth in the second quarter because we had difficult expense comps from the second quarter of last year. Those operating models now have largely normalized. We will have a more normalized comparison as we look into next year.
And again, we feel better that we are going to have expense growth that’s going to look much more like kind of inflationary type of growth next year versus kind of the unique comparisons we had this year.
Bill Crow: Jon, that’s helpful. Does that mean that kind of 2.5% RevPAR growth next year should generate those same sorts of flat margins?
Jon Stanner: Yes. Look, again, I don’t want to get out kind of over our skis on where we think the year is going to translate. I would say that 2.5% RevPAR growth historically has been where we felt we could breakeven from a margin perspective, and that played out in the third quarter. I do think some of that was our ability to eliminate some contract labor. And I think some of that going forward is going to be what mix is generating that RevPAR growth, the mix of rate and occupancy. We did it this quarter on essentially 0% ADR growth. It was actually slightly negative. We did it on all occupancy growth. My expectation is that we probably need a little bit more than that next year to breakeven on margins. But it’s really premature to get too far into that conversation given where we are in the budget process.
Bill Crow: Sure. Two other quick ones from me. You talked about wanting to get potentially back into the acquisition side to face, anything you are looking at from the glamping side, or are the yield possibility in the future growth from traditional hotels just too attractive at this point?
Jon Stanner: No, the – look, the yield on the glamping opportunities are still interesting. I think that we have announced that we have a development underway at our Fredericksburg asset. And then we do have a mezzanine loan that’s outstanding that’s part of the glamping opportunities. Beyond that, we have been focused on kind of the capital allocation priorities that we have talked about before. But the business continues to perform very well. The yield profile of the business is still very compelling.
Bill Crow: Thanks Jon. Finally, for me, the NCI portfolio continues to deliver terrific results. But it’s also sitting in the kind of in the pathway of what’s going to be the highest supply growth in the country, in the Dallas-Fort Worth metro books. And I am just wondering if you are now going to be kind of fretting over some of the supply deliveries, or if you feel good that those particular assets are maybe a little bit more out of the way of that path of growth?
