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Call Date: 2024-09-18
Moderator: Meridian Insights Primary Research
Participants:
  - Senior Analyst, Summit Peak Capital (Analyst)
  - Multi-Unit Franchisee, Seabright Hotels (Expert)
Sector: Global Travel & Leisure - Lodging
Duration: 29 minutes

[00:02] Analyst: Appreciate you making time. How are room rates holding up as we roll into Q4?
[00:05] Expert: Coastal hotels are still humming. My average daily rate is running about 7% above 2019 comps. Secondary markets—think Midwest off-interstate properties—are softer, down roughly 4% year over year because group business is only trickling back.

[00:16] Analyst: You're still fighting staffing issues, or has that cooled off?
[00:18] Expert: Housekeeping turnover is sitting near 70% annualized. We launched an evening program with the local community college, which helps, but wages are up 16% versus 2021 to keep people in the door. It's the price of staying fully staffed.

[00:30] Analyst: Any big maintenance or renovation projects restarting?
[00:32] Expert: Yep. We paused lobby refreshes in 2020 and they're finally back on the books for October. Total spend is about $2.8 million across five hotels. Lenders are fine with it because we're running a 1.7x debt service coverage ratio.

[00:44] Analyst: How sticky is loyalty behavior right now?
[00:46] Expert: Elite members are leaning in. Redemption nights are up 18% versus last year since we moved to dynamic award pricing. Cash stays from that segment are flat, but the bar tabs and parking add-ons are adding about 12 bucks per stay.

[00:58] Analyst: What are you seeing on the development pipeline?
[01:00] Expert: New builds are tough—banks want 40% equity, so most deals pencil out only if someone's got patient capital. I'm focusing on conversions: two independent hotels are coming into the flag and should pay back in under five years thanks to the loyalty funnel.

[01:14] Analyst: Supply chain better for FF&E?
[01:15] Expert: Way better than last year. Casegoods and carpet are back to six-week lead times. Custom lighting is still the laggard at about 14 weeks, but that's manageable if we order early.

[01:25] Analyst: What's your biggest headache headed into storm season?
[01:27] Expert: Insurance. Carriers in coastal zones keep jacking deductibles. We're moving two of the riskier properties into a captive program just so we can sleep at night.

[01:38] Analyst: Any closing advice for investors trying to size the lodging recovery?
[01:40] Expert: Focus on operators who nailed the staffing partnerships and asset quality. That's what's letting us keep rate while everyone else discounts.
