Q1 2024 RLJ Lodging Trust Earnings Call Transcript
Key Points
- RLJ Lodging Trust reported solid first quarter operating results, with RevPAR growth of 1% primarily driven by a 1.2% increase in occupancy.
- The company successfully executed multiple high-return ROI projects, enhancing out-of-room spend by 7.7%, leading to total revenue growth of 3.1%.
- RLJ Lodging Trust is seeing strong returns from its investments, particularly in conversions in Charleston, Mandalay Beach, and Santa Monica, which achieved 26.5% RevPAR growth.
- The company expanded its pipeline of conversion opportunities with the acquisition of the Wyndham Boston Beacon Hill, expecting over 40% of EBITDA upside following repositioning.
- RLJ Lodging Trust's urban-centric portfolio is well-positioned to benefit from robust group activity, improving inbound international demand, and the steady improvement in corporate travel.
- The shift of Easter into March muted citywide and other group activity during the most significant month of the quarter, impacting growth.
- Cold and rainy weather in California and South Florida negatively impacted these markets during the quarter.
- Inflationary pressures, although normalizing, continued to impact operating costs, with total hotel operating cost growth limited to 2.9%.
- Fixed costs such as insurance and property taxes were significant drivers of year-over-year increases in hotel operating expenses, increasing by 15% during the first quarter.
- The company acknowledged macroeconomic uncertainty and the potential impact of Federal Reserve actions to slow the economy, which could affect travel and lodging demand.
Welcome to the RLJ Lodging Trust First Quarter 2024 earnings call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation there will be an opportunity to ask questions. If anyone should require operator assistance during the please press star zero on your telephone. I would now like to turn the call over to Nikhil Bhalla, Senior Vice President, Finance and Treasurer. Go ahead.
Thank you, operator. Good morning, and welcome to RLJ Lodging Trust's 2024 first quarter earnings call. On today's call. Leslie Hale, our President and Chief Executive Officer, will discuss key highlights for the quarter. Sean Mahoney, our Executive Vice President and Chief Financial Officer, will discuss the company's financial results Tom Wagner, our Chief Operating Officer, will be available for Q&A. Forward-looking statements made on this call are subject to numerous risks and uncertainties that may lead the company's actual results to differ materially from
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