Greetings, and welcome to the Apple Hospitality REIT Second Quarter 2024 Earnings Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. [Operator Instructions]. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Kelly Clarke, Vice President of Investor Relations. Thank you. You may begin.

Thank you, and good morning. Welcome to Apple Hospitality REIT second quarter 2024 earnings call. Today's call will be based on the earnings release in Form 10-Q, which we distributed and filed yesterday afternoon. Before we begin, please note that today's call may include forward-looking statements as defined by Federal Securities Laws. These forward-looking statements are based on current views and assumptions, and as a result are subject to numerous risks, uncertainties, and the outcome of future events that could cause actual results, performance, or achievements to materially differ from those expressed, projected, or implied. Any such forward-looking statements are qualified by the risk factors described in our filings with the SEC, including in our 2023 Annual Report on Form 10-K, and speak only as of today. The company undertakes no obligation to publicly update or revise any four looking statements except as required by law. In addition, non-GAAP measures of performance will be discussed during this call. Reconciliations of those measures to GAAP measures and definitions of certain terms referred to in our remarks are included in yesterday's earnings release and other filings with the SEC. For a copy of the earnings release or additional information about the company, please visit applehospitalityreit.com. This morning, Justin Knight, our Chief Executive Officer, and Liz Perkins, our Chief Financial Officer, will provide an overview of our results for the second quarter of 2024 and an operational outlook for the remainder of the year. Following the overview, we will open the call for Q&A. At this time, it is my pleasure to turn the call over to Justin.

Good morning, and thank you for joining us today for our second quarter earnings call. As we move into the back half of 2024, the fundamentals of our business remain strong. The rate of new supply growth in our markets is muted relative to historical levels, allowing us to benefit more fully than we have in past cycles from incremental demand growth. We were able to grow Comparable Hotels occupancy more than 2% year over year during the quarter and achieved overall portfolio occupancy of 80%. While we believe that our greatest opportunity for growth will come as a result of the steady improvement we are seeing in midweek business travel demand, we were able to grow occupancy on both weekdays and weekends during the quarter, demonstrating the resilience of leisure travel demand and the upside we continue to realize as corporate, small, and medium-sized business travel normalizes. The Comparable Hotels RevPAR for the quarter grew 2.5%, with ADR up slightly year-over-year. Our Revenue and Asset Management teams, together with our third-party operators, are intently focused on maximizing the profitability of our assets and optimizing their performance within their respective markets. Expense growth is moderating, supporting strong bottom-line performance for our portfolio. For the quarter, we achieved a Comparable Hotels adjusted hotel EBITDA margin of 39%, a year-over-year decline of 50 basis points. Second quarter adjusted EBITDAre was $141 million, and modified funds from operations was $121 million, both up 9% as compared to the second quarter of 2023. Our portfolio continued to perform ahead of pre-pandemic levels, with Comparable Hotels RevPAR for the quarter up 11%, and Comparable Hotels adjusted hotel EBITDA up 12% as compared to the second quarter of 2019. Supported by our strong operating performance, we continue to provide investors with an attractive dividend yield. Modified…

Thank you, Justin, and good morning. We are pleased to report another strong quarter for our portfolio of hotels. Comparable Hotels total revenue was $387 million for the second quarter of 2024 and $718 million year-to-date through June, up 3% and 2% as compared to the same period of 2023. With continued strength in leisure demand and additional recovery in business demand, second quarter Comparable Hotels RevPAR was $130, up 2.5%. ADR was $163, up slightly, and occupancy was 80%, up 2% as compared to the second quarter 2023. A strong second quarter brought year-to-date through June Comparable Hotels RevPAR to $121, up more than 1%, occupancy to 76%, up more than 1%, and ADR to $159, essentially flat to the same period of 2023. Because of calendar shifts with the Easter holiday, April was our strongest month during the quarter, with year-over-year Comparable Hotels RevPAR growth of nearly 5%. The shift of the Juneteenth holiday to midweek this year, as well as having five Sundays during the month, impacted performance for June, with year-over-year RevPAR growth of just under 1%. With a challenging start to the month with the 4th of July holiday, preliminary results for July show essentially flat occupancy year-over-year, with continued pressure on ADR resulting in modest declines in RevPAR. Looking at day-over-day trends, leisure travel continues to be resilient. Weekend occupancies were up 2.3% during the second quarter as compared to the same period last year. We also saw steady improvement in weekday occupancies, with growth of 2.3% during the second quarter as compared to the same period of 2023. While we have been pleased to see steady improvement in overall demand, leisure demand, which has produced the strongest rate growth post-pandemic, showed signs of increased rate sensitivity during the quarter, and midweek demand came…

Thank you. We will now be conducting a question and answer session. [Operator Instructions]. Our first question comes from Dory Kesten with Wells Fargo. Please proceed with your question.

Thanks. Good morning. In June, you talked about the expectation that business transient versus leisure rates should eventually return to a more normalized spread. Where are you now versus ‘19, and what's your expectation for that spread in the second half of the year?

We are still meaningfully behind that spread relative to 2019. We had seen a complete reversal in trends where we had been maybe 800 basis points higher midweek than we were on weekends post-pandemic. That switched and flip-flopped. We're shrinking the gap, but not as quickly as we'd like. From a growth rate perspective midweek, we'd certainly like to see it there. As leisure price sensitivity continues, that gap can shrink that way too, which obviously would not be preferable. But we still have upside relative to the pre-pandemic spread between midweek and weekend occupancy rates.

And as we highlighted in our prepared remarks, that's where we see the biggest upside on a go-forward basis.

Okay. And then based on your new guidance, would you need to or potentially choose to change your dividends on the current $0.08 monthly level?

No. I think I highlighted in my prepared remarks, we have more than adequate coverage given what we've anticipated for the remainder of the year.

Correct. And last one. Are there potential acquisitions you may be close on but have paused progress on just given where your stock is trading? Just trying to get a sense of how much of a pipeline there is to the extent that your stock price improved in the near-medium term.

It's interesting. We are underwriting as many deals as we ever have. And a significant number of those deals meet our investment criteria in terms of strategic fit. Certainly, as I mentioned in my prepared remarks, we take into consideration where we're trading as we price those assets. And I think similar to others in this space, we’ve bid wide of seller expectations. In the current environment, with continued strength in overall operations, most sellers are choosing to hold assets rather than adjust pricing. And I think unless we were to see a meaningful shift in our overall cost of capital, I think it's unlikely that you would see us become more aggressive on the acquisitions front. That said, we're poised and ready and in continual discussions with a number of potential sellers. We're incredibly pleased with the performance of our recent acquisitions to date. They've been meaningfully additive to our portfolio and have lifted portfolio performance from a growth standpoint. DC, which is one of our recent acquisitions, was up top line over 9% during the quarter. Las Vegas was up almost 19% during the quarter. And certainly, we are incredibly pleased with the yields we're achieving on those assets. We'd love to be in a position to pursue more, but as you saw in the quarter, we also see tremendous value in our shares. A strong, stable platform yielding very well at an incredibly attractive price per key. And we have the flexibility and the ability to pivot towards share repurchase, but that makes sense.

Perfect. Thank you.

Thank you.

Our next question comes from Austin Wurschmidt from KeyBanc Capital Markets. Please proceed with your question.

Thanks. Good morning, guys. What do you guys think needs to happen here for you to see some additional rate upside or shift in the mix of corporate accounts to drive that mid-week ADR? And I guess, does any of the softening in economic data give you pause about how that plays out from here and maybe the pace of improvement as sort of supply is in a pretty good position. You suggested demand still looks really good, but just wondering if you're seeing any of that change in sort of the booking pace. Thanks.

I think in terms of booking pace, we continue to feel reasonably good about how that's playing out, remembering again, that we have very little visibility into the future based on booking patterns for the typical guests at our hotels. That said, as I highlighted earlier, we continue to have markets that are growing at an incredibly strong rate. And because we're broadly diversified, we have exposure to a lot of different markets and different market types. I'd say overall, what we saw yesterday and what we've seen in some recent economic data has yet to meaningfully impact our performance. And assuming we are able to continue to grow occupancy, we would anticipate on the margin that we would be in a better position to move rate, especially mid-week. We've had the conversation in the past, and it's certainly worth mentioning. A portion of our corporate accounts are on fixed price contracts, which tend to renew on an annual basis, and we will very shortly enter negotiations around those accounts. With the backdrop of significantly higher occupancy, we see ourselves in a meaningfully better position to negotiate pricing that's favorable for us in those discussions, assuming a reasonably strong backdrop from an economic standpoint. And we will certainly be watching that over the next several months.

And as we approach our peak season, we also will be focused, as I think the brands continue to be, from the corporate side as well, to continue to move more of our local and corporate negotiated accounts to a percentage off of PAR [ph] versus fixed rates, which to the extent demand continues to improve and we are able to realize compression mid-week, that should put us in a better position to drive rate as well.

Have you analyzed, I guess, if you were in that position where it was the percentage of PAR, what that would have done differently with the rate upside today versus having the fixed price contracts in place?

No, I mean, we have not dug in to all our various corporate and negotiated accounts to analyze what the delta would have been if it was the percentage off PAR versus static rates. As you can imagine, with over 200 hotels and a multiple of that in negotiated rates, that would be challenging to do. That said, we have seen where being able to manage your mix of business as it relates to supply and demand and compression on a given night and using a percentage off of PAR puts us in the best position to manage negotiated discounts throughout the year.

Understood, no, that's fair. And then just last one for me, as far as the guidance revision, you provided a lot of detail, but how much of it would you attribute to the leisure weekend piece versus weekday?

The revision is particularly, as it relates to RevPAR is predominantly rate-driven. The net effect of both of what you mentioned, the shift from some leisure and some price sensitivity around leisure to midweek demand coming in at lower growth rates, but also at lower absolute growth rates. Similar to Dory's question at the beginning, recognizing that the spread is very different than it used to be between midweek and weekend rates in a post-pandemic world. We've shrunk that gap a little bit and given the prepared remarks just in the second quarter, we're probably still over 600 basis points of premium on weekend rates versus midweek rates. And so I think a big portion of the guidance revision was directly related to ADR and it's really the net effect of both of your questions.

That's helpful. Thanks for the time, appreciate the thoughts.

Thank you.

Our next question comes from Jay Kornreich with Wedbush Securities. Please proceed with your question.

Hi, thanks so much. Good morning. It looks like there's a trend at the top end of the portfolio kind of outperforming the lower end, both in your top 20 markets and also at the upper upscale and upscale hotels outperforming the lower end, upper mid-scale assets. So I'm just curious, can you maybe just talk about the weakness that you're seeing on the lower end customer at the lower scale and is that working up the chain scale? Is it working up to the top 20 markets or is there really a divergence between those two?

Really most of what you're seeing in our portfolio is more market driven than it is asset category driven. And so while we have heard similar to what you've heard of weakness with lower end customers, we have not generally seen that trend at least absent pairing it with performance of individual markets. When we look at weaker markets in our portfolio or the performance of weaker assets in our portfolio relative to stronger assets, there's a reasonable mix of assets at both ends.

And if you look at our upper upscale assets, really they were being driven by our Marriott Full Serve properties and that's market specific as Justin mentioned. Houston is one of our top performing markets for the quarter. We continue to see corporate demand there increase and we've also benefited from storm related business. Just all-in-all, the market seems to be improving meaningfully and that helped that upper upscale number look like it's outperforming. And when you look at upper mid-scale, the Home2 Suites where that is down, it's again less a Home2 Suites or a chain scale issue. It's more related to the negative impact of our Orlando Home2 which has underperformed.

Okay, that's a very helpful context. Thank you. And then just one follow up. As I look at the monthly performance and the release, it looks like April started strong in the quarter and then a little bit worse each month as it progressed. So I'm just wondering how does that compare to your initial expectations for the quarter and I'm assuming that trend leading into July. What are your thoughts going forward in terms of holding RevPAR flat for the second half of the year versus maybe any potential upside?

Very good question. I think when we put initial guidance together, we had assumed fairly consistent performance month to month throughout the quarter and really across the second and third quarter. We were certainly benefited and met expectations in April as a result of the Easter holiday shift. And really we started to see, as we moved throughout the quarter, an unanticipated pullback from a leisure rate perspective. And so that's really where we underperformed. If you think about our day over day occupancy performance that we mentioned in our prepared remarks and if you look at occupancy performance for the quarter and throughout the month, generally speaking, occupancy held in, where we continued to see degradation from a rate perspective. And some of that is nuanced related to holidays and things like that. You had Juneteenth that really impacted June as well. But in general, where we underperformed our expectations throughout the quarter and as we moved through the quarter and what we're seeing today, is just that price sensitivity from the leisure consumer, which wasn't originally banked into our guidance.

Okay, thank you so much. That's it for me.

Thank you.

Our next question comes from Bryan Maher with B. Riley Securities. Please proceed with your question.

Thank you and good morning. Two questions for me today. We touched a little bit upon this weekday versus weekend, but can you drill down a little bit more on the weekday mix of business? Are any business groups or type of business swapping out for the other? And we've heard that small and mid-sized business travel has come back more robustly than larger business travel. Are you seeing that? And can you give us a little color there?

So I'll start with the second part of your question. And that is that we certainly early in the pandemic saw meaningful improvement in small and medium-sized business travel. That trend has continued. And that base has continued to be robust for us. We've seen a meaningful improvement in corporate travel as well. And so when you look at the growth that we saw midweek during the second quarter, it was a mix of a small, medium-sized business as well as larger corporate accounts. In terms of mix otherwise between group, that trend has really stayed relatively consistent. And I guess on the margin when we look at shoulder nights, we believe that we've likely seen some pullback in leisure on shoulder nights. But in most cases replaced with business travel on those nights. As Liz highlighted, Monday continued to be a strong rate performer with continued improvement in occupancy. And certainly Tuesday, Wednesday, which historically were among our highest occupancy nights, continue to see meaningful growth during the quarter as well.

Thanks. And then over the past few years, you've had a couple of these takeouts of new construction at fixed pricing, which I have to believe with inflationary pressures on the builders, you probably got the better end of the stick there. Are you still seeing those opportunities? And when you do see those opportunities, are the developers jacking up the price such that maybe it's not as attractive as it was and you may skew your acquisition dollar towards maybe a stressed seller sale or an asset owned by a financial institution?

I think construction costs certainly increased meaningfully during the pandemic. Those increases were further exacerbated by meaningful increases in borrowing costs, which blew budgets for a number of developers. As you highlighted, we feel incredibly good about properties like the Madison Embassy, which we acquired just north of 300 a key. The asset's super high quality in a wonderful location Downtown, a block off the capital, a block away from the convention center. We believe it would be difficult to replicate that asset at that price. And I think as we underwrite future development deals, we're challenged to find deals that work for us and the developers. And I don't think that's limited to us. I highlighted in my prepared remarks, we continue to see limited new supply in most of our markets. I think that is not because developers have ceased wanting to develop. It's more that they're challenged in their underwriting of new development deals given the meaningful increase in construction costs, interest rates being meaningfully higher, and I think slower growth in terms of operating fundamentals for most markets. As a result, I think we'll be selective in signing up future development deals. We're excited about the development deal that we currently have under contract in Nashville. I think that's going to be an exceptional asset for us. But a significant portion of our focus recently has been on the acquisition of existing assets where we've been able to achieve really strong yields buying assets we believe below their current replacement values. And I think, at least in the case of Vegas, having built into that acquisition a future development opportunity that we're currently exploring.

Well, developers, I have found, never cease to want to develop if they can. So it is what it is. Thank you for your comments. Appreciate it.

Absolutely.

[Operator Instructions]. Our next question comes from Jonathan Jenkins with Oppenheimer. Please proceed with your question.

Good morning. Thanks for taking my question. Liz, you talked about the holiday impact in June and July. Can you just provide some additional color on the softness around the holidays and how demand has trended more recently in the second half of July and into August? And as a follow-up, it sounds like the leisure price sensitivity has consistently softened over the quarter, regardless of the holidays. Did your guidance assume a further softening in leisure demand going forward?

Good morning. So for trends related to July, because of the way the 4th of July holiday hit later in the week, that first week of July, it really impacted both the first two weeks, whereas we've historically seen not quite as much impact in that second week. The week immediately following that, we saw similar trends to what we had been seeing, where we were growing occupancy and RevPAR overall with some rate growth as well. The last week, unfortunately, was a little bit cloudy with the CrowdStrike impact of travel. And I think that potentially that had some limited impact on or some impact on last-minute travel. And we pick up a lot of business in the week for the week. So July was noisy. And thinking about that and looking at our booking position and thinking about guidance overall for the back half of the year, July was a little too noisy to draw massive conclusions from. But I do think the mixed shift and the price sensitivity around leisure was something that we felt was prudent to bake in, given the consistency of that trend over especially the last two months of the quarter. And looking at average daily bookings through the 1st of August, they're still up. So from a demand standpoint, average daily bookings are still up from a room-night perspective. We've been materializing, even with the noise in July, flat or up from an occupancy perspective. So demand-wise, I think we felt reasonably good with continuing to assume we'd have strong demand. And again, even on the weekends, where we've seen some pullback, it is not meaningful. Overall demand is still strong. And so as we look forward, we did assume, and really the guidance updates from a top-line perspective are primarily driven by that rate degradation with leisure sensitivity and the mixed shift.

Okay, very helpful. Maybe as a follow-up on that, you guys in the past have talked about the margin profile for the industry being dependent on rate growth. And I'm curious, given recent updates across the industry for a relatively muted rate growth environment in the near term, if you think that there's potential for the margin profile of the overall industry to stabilize at or around pre-COVID levels?

I think certainly we've been pleased with expense growth in the quarter and baked a portion of that into our guidance on a go-forward basis. I think we've benefited from a pullback in overall inflation. The job market has stabilized somewhat, and that's been beneficial to us. And we've been able to shift some of our workers away from contract labor, which has provided us some savings. I think it's important to note as well that as we continue to shift mix towards midweek, increasing the percent of our business coming from business travelers, there's likely to be a benefit to margins given reduced costs to provide services to those guests. And so given that a portion of the pullback in rate or the weight on ADR that we saw during the quarter was related to the mixed shift and the absolute lower rates that we've been able to achieve midweek, the fact that those guests are also among our less expensive guests to provide services to has been a meaningful benefit as we look at impact to margins.

I appreciate that color. And then last one for me, if I could, on acquisitions. Can you talk a little more about the pipeline? How many assets are you currently looking at today versus a few months ago? And as you look into the future, have you seen any shift in industry expectations for transactions given the recent softening in industry demand trends, but seemingly heightened potential for lower rates, maybe increasing RevPAR?

It's interesting. We continue to have a very strong pipeline. We've underwritten year-to-date billions of dollars worth of assets. And as I mentioned earlier, a significant portion of them would be a strategic fit for our portfolio, allowing us to enter into markets where we have limited exposure, but would like to have greater exposure and or further enhancing the quality of our overall portfolio. I think the bid-ask spread is real and it's likely the single most important consideration as we think about actual transaction volume. That said, because the hotels are not trading, they continue to potentially be available. And should we see a shift in our cost of capital, we would be well positioned to shift focus further towards acquisitions. That said, I've been clear, I think, in past calls, our expectation is that a portion of those deals will come to market as they approach refinancings, especially where ownership groups are forced to reinvest in the assets in order to pay down debt balances as part of that refinancing. And it's possible that we'll see better pricing on a portion of the assets in the coming months. That said, in many cases, operating performance for these assets continues to improve. And many owners would prefer to sit on the assets, especially given alternatives for those dollars, rather than adjust pricing down for the assets today.

Okay, that's excellent color. Thank you for the time and all the color this morning. That's all from me.

Thank you.

Thank you.

Our next question comes from Daniel Hogan with Baird. Please proceed with your question.

Hi, good morning. Thanks for taking my question. Can you just give some color on the New York property? Just how you're thinking about it in terms of run rate performance and then where's the process in terms of resolution on that? Are you expecting to be made whole or would there need to be a further adjustment to guidance?

So, importantly, LuxUrban has failed to make timely payments from the very beginning. And so, as we thought about how we would account for those payments, we have from the beginning accounted for cash as it was received, rather than accruing for payments that we anticipated we might receive at some future date. We received our last payment from March and in April filed a petition to remove them. We have been awaiting a court date since and anticipate we will have an opportunity to visit with them in court here shortly. We have, in addition to the petition to have them removed from the asset, filed suit against them for over $82 million or approximately $82 million in damages consistent with the terms of our lease. Importantly, that's much more than the company is worth today. I think we're realistic in terms of our expectations related to our ability to collect that full amount. From an accounting perspective, we have been and will continue to be conservative, taking into consideration in future guidance the fact that there may be a bit of time still before we're able to retake possession of the asset and an expectation that in the near term there may be transition costs associated with taking the hotel back over. But we will continue to keep you updated on that. Certainly are unhappy with how things have played out with LuxUrban. We are not the only lessor that has a conflict with them right now. And I think it will be interesting to see how things play out over the next little bit. It's also important to remind you that while the asset has taken up a significant portion of our time recently, it's still an immaterial piece of our overall business.

And as you look at the guidance revisions that we did make with the second quarter update, we did assume the later transition date where we would regain possession of the hotel later this year versus the original 7-1 assumption given the fact that we've had to proceed this way to regain possession of the hotel. So, that's accounted for, as Justin mentioned, also there is some transition and liability assumption in there as well. So, anything that we can see today we've accounted for. And part of the disconnect between Q1 and Q2 earnings is the later takeover date, so not benefiting from operations from the hotel.

Got it. Appreciate that color. And then just one more on the channels. With the OTA usage and other discounted channels, I know you gave those numbers, but were those higher than your original expectations for 2Q? And would that signal to you in terms of customer preferences for what you're seeing?

They were fairly in line. OTAs were up a little bit for the quarter, but not materially, not so much that it was dramatically different than what we would have assumed given strong leisure-oriented quarter. I think, again, where we got surprised was less around room-night mix and more around ADR.

Great. Thank you for the time.

Thank you.

Our next question comes from Floris van Dijkum with CompassPoint. Please proceed with your question.

Hi. Good morning. This is Ken Billingsley for Floris. I wanted to ask a question on the market mix and specifically Tennessee and North Carolina. Obviously, both of them are positive from an EBITDA standpoint, but you're seeing falling RevPAR. In Tennessee, it looks like it's a rate issue, and North Carolina segment occupancy. Could you just talk about those two segments?

Tennessee is primarily driven by Memphis. That market has been a little bit challenged in a post-COVID world from a reputational perspective and safety perspective. And the convention calendar has been weaker there. That's really driven the Tennessee performance. North Carolina, I'll have to look at quickly.

As you're looking that up, because I wanted to follow on to some comments earlier where you were talking about, obviously, you look at your assets in your portfolio to try and improve it. And I'm not saying that these would be two markets you'd be looking at to maybe trade out assets, but as you identify assets in your markets to improve, how do you prioritize the use of the capital through stock buybacks versus acquisitions that you've discussed on the call or other options? And specifically, how do you balance the long-term versus the short-term decision to deploy that capital? So short-term on improving the NAV and FFO versus growing EBITDA?

The answer to that question is actually pretty simple. We prioritize EBITDA growth above kind of all other metrics. So, we look at NAV growth, but I have found that to the extent we're focused on EBITDA growth, both near and long-term, we're more likely to see growth in the overall value of our portfolio. As we weigh options for capital allocation between acquisitions, new developments, and share buybacks, I think we do so using simple calculations. There's a slightly different dynamic purchasing a large stabilized portfolio versus an individual asset in terms of likely growth trajectory. As you've seen recently, given the pullback in our share price, we believe there's meaningful value in our shares, and I think deployed capital has seen that opportunity. So, I think how we utilize proceeds from asset sales is very much dependent on the dynamics we see in the market at any point in time.

And would it be safe to assume that given how the whole sector is trading, that maybe there's a little bit more emphasis on stock buybacks right now, or would you still say it's still going to be formulaic?

I would say that the pullback we've seen in our share price has not been matched by a similar pullback in the pricing for assets that we're underwriting, and that certainly impacts our preference. I think to the extent that changes, we're in the mix and could adjust strategy, but I think given what we've seen recently, I think we continue to see value in our shares.

Great. Thank you, appreciate it. And…

Yeah, circling back on the North Carolina East question, it's really a combination of a couple things. Carolina Beach had more trouble from a rate perspective, still really healthy occupancy, actually grew occupancy year-over-year, but at a lower rate, so lost about 6% in rates. So that really is what was driving that. Also, we have a Fayetteville Home2 in North Carolina East, which had a softer government quarter.

Thank you for answering my question. Appreciate it.

Thank you.

There are no further questions at this time. I would now like to turn the floor back over to Justin Knight for closing comments.

We appreciate you making time to join us this morning for this earnings call. We look forward to visiting with many of you on the road, and please, as always, to the extent you're traveling, we hope you'll take an opportunity to stay with us in one of our hotels. Have a great day.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.