Thank you, Reagan, and welcome to Xenia Hotels & Resorts first quarter 2026 earnings call and webcast. I'm here with Marcel Verbaas, our Chair and Chief Executive Officer; Barry Bloom, our President and Chief Operating Officer; and Atish Shah, our Executive Vice President and Chief Financial Officer.

Marcel will begin with a discussion on our performance. Barry will follow with more details on operating trends and capital expenditure projects.

Atish will conclude today's remarks on our balance sheet and outlook. We will then open up the call for Q&A.

Before we get started, let me remind everyone that certain statements made on this call are not historical facts and are considered forward-looking statements. These statements are subject to numerous risks and uncertainties as described in our annual report on Form 10-K and other SEC filings, which could cause our actual results to differ materially from those expressed in or implied by our comments.

Forward-looking statements in the earnings release that we issued this morning along with the comments on this call are made only as of today, May 1st, 2026, and we undertake no obligation to publicly update any of these forward-looking statements as actual events unfold. You can find a reconciliation of non-GAAP financial measures to net income and definitions of certain items referred to in our remarks in our first quarter earnings release, which is available on the Investor Relations section of our website.

The property-level information we'll be speaking about today is on a same-property basis for all 30 hotels unless specified otherwise. An archive of this call will be available on our website for 90 days.

I will now turn it over to Marcel to get started.

Thanks, Adal, and good afternoon, everyone. We are pleased to report strong first quarter 2026 results that exceeded our expectations across all key metrics.

Our portfolio delivered exceptional first quarter performance driven by strength in both the group and transient demand segments, especially in the month of March. We also saw highly encouraging results at Grand Hyatt Scottsdale Resort as it continues on its path toward stabilization following the completion of its transformative renovation.

For the first quarter of 2026, we reported net income of $19.8 million, adjusted EBITDAre of $81.4 million, an increase of nearly 12% to last year, and adjusted FFO per share of 63 cents, which was 23.5% higher than the first quarter of 2025. For the first quarter, our same-property RevPAR grew 7.4% with occupancy increasing 180 basis points and average daily rate increasing 4.8% compared to the first quarter of 2025.

Additionally, we continue to benefit from strong growth in non-rooms revenues as evidenced by our same-property total RevPAR for the quarter growing to $370.13, reflecting an increase of 7.2% as compared to the same quarter last year. Food and beverage revenues increased 6.2% on a same-property basis, reflecting continued growth in banquet and catering revenues as well as our ongoing focus on outlet optimization efforts, while other revenues were up nearly 11% for the quarter.

Same-property hotel EBITDA for the quarter was $87.8 million, an increase of almost 18% compared to the same period last year. Significant growth in rooms revenues, a large portion of which consisted of rate growth, combined with disciplined expense management drove an improvement in same-property hotel EBITDA margin from 27% in the first quarter of 2025 to 29.7% this year, an expansion of 270 basis points.

At Grand Hyatt Scottsdale Resort, record revenues and hotel EBITDA were achieved for the first quarter as ramp-up of the overall resort continues. The resort has seen successful execution of occupancy-driven ramp-up plans that have produced significant transient business volumes to supplement the growing base of group demand.

These improvements have translated throughout the operation into records in food and beverage outlets, spa, recreation, parking, and miscellaneous revenues. Expenses have grown at a slower pace as much of the occupancy gains have required relatively limited incremental costs.

As a result, the resort's hotel EBITDA margin improved significantly during the first quarter. While Grand Hyatt Scottsdale was a significant driver of our first quarter outperformance, we experienced broad-based strength across our portfolio of luxury and upper upscale hotels and resorts.

Increased group and transient demand contributed to RevPAR and total RevPAR increases in 15 of our 22 markets. In addition to the Phoenix Scottsdale market, we experienced double-digit percentage total RevPAR growth in Salt Lake City, Birmingham, Portland, Santa Clara, Santa Barbara, and Houston, which is indicative of the range of markets and demand segments that contributed to our strong performance for the quarter.

Our weakest performers for the quarter on a year-over-year basis were as anticipated as these properties either benefited from one-time events last year such as the Super Bowl in New Orleans and the presidential inauguration in Washington, D.C., or experienced some disruption due to capital projects, specifically Fairmont Pittsburgh and W Nashville. W Nashville also was impacted by several weather events that negatively impacted performance for the quarter.

We continue to benefit from our portfolio's favorable positioning and diversification as it relates to the various demand segments. Group rooms revenues increased in excess of 7% for the quarter as compared to the same period last year.

Bolstering our performance, transient rooms revenues also grew approximately 7% for the quarter, primarily driven by extremely strong performance in March as the timing of Easter in early April appeared to compress high levels of corporate transient and leisure demand into the month of March. Now turning to capital expenditures.

We continue to expect to spend between $70 and $80 million on property improvements during the year. During the first quarter, we completed the renovation of the M Club at Marriott Dallas Downtown and the guest room renovation at Fairmont Pittsburgh, which was completed as planned with limited disruption, on budget, and in advance of the NFL Draft that took place in Pittsburgh last week with record attendance.

On our last couple of earnings calls, we expressed our excitement about the reconcepting of the food and beverage outlets at W Nashville. We are pleased to report that all outlets have opened for business and were completed on time and within budget.

The new outlets are tremendous new amenities for the hotel, and initial feedback from customers has been extremely positive. Barry will provide additional details on our capital projects, including the Nashville food and beverage reconcepting, during his remarks.

Looking ahead to the second quarter, we are encouraged by the continuation of the positive momentum our operators are reporting for April. While calendar shifts related to Easter timing and spring breaks contributed to our outstanding results in the month of March, we estimate that April same-property RevPAR increased nearly 6% as compared to April 2025.

The estimated RevPAR growth of over 10% that our portfolio experienced during the combined months of March and April is a reflection of strong demand in our markets when eliminating the impact of the timing of Easter compared to last year, with our larger resorts benefiting a bit due to safety concerns in Mexico and weather conditions in Hawaii. Turning to our outlook for the remainder of the year.

Given the stronger-than-projected first quarter results, we have raised our full year 2026 adjusted EBITDAre guidance by $6 million to $266 million at the midpoint. Our guidance for adjusted FFO per share for full year 2026 is now $1.94 at the midpoint.

This would represent an increase of approximately 10% over 2025. While we are encouraged by our first quarter performance as well as demand trends in April, a significant amount of overall market and geopolitical uncertainty continues to exist as we look ahead to the remainder of the year.

As such, we have not changed our outlook for the balance of the year when compared to our previously issued guidance. Atish will walk through all of our current 2026 guidance items in more detail, including our updated views of the anticipated demand lift from one-time events such as the FIFA World Cup and America 250.

Although we have not completed any transactions since the sale of Fairmont Dallas last year, we have significantly improved our portfolio through robust acquisition and disposition activity since our listing in 2015. We continue to evaluate potential transactions with an eye towards further portfolio improvement and sustainable earnings growth in the years ahead.

The transaction market and opportunity set appear to be a bit more robust than they have been in the last couple of years, and we will continue to evaluate these opportunities while being mindful of our balance sheet and other capital allocation priorities. While the macroeconomic environment remains fluid and uncertain, we continue to believe our portfolio is very well positioned for continued earnings growth.

The quality of our luxury and upper upscale hotels and resorts in top 25 and key leisure markets, combined with our experienced operating partners and a favorable supply backdrop for the next several years, provide a solid platform for continued outperformance in 2026 and in the years ahead. I will now turn the call over to Barry to provide more details on our first quarter operating results and our capital projects.

Thank you, Marcel, and good afternoon, everyone. For the first quarter, our 30 same-property portfolio RevPAR was $205.93, an increase of 7.4% as compared to the first quarter in 2025, based on occupancy of 71.4% and an average daily rate of $288.62.

Properties achieving double-digit RevPAR growth as compared to the first quarter of 2025 included Grand Hyatt Scottsdale with RevPAR up 46.2%, Kimpton Hotel Monaco Salt Lake City 27.2%, Andaz Savannah up 16.4%, Hyatt Regency Santa Clara up 14.7%, Grand Bohemian Hotel Mountain Brook up 13.9%, and Kimpton Canary Hotel Santa Barbara up 12%. Growth at these properties was due to a variety of factors including increased citywide demand, stronger leisure demand in drive-to markets, and one-off major events.

Properties with softer performance in Q1 this year included Loews New Orleans, which hosted the Super Bowl in Q1 of 2025, The Ritz-Carlton Pentagon City, which lapped last year's presidential inauguration, and W Nashville due to poor weather and anticipated disruption from the Jose Andres food and beverage relaunch. Looking at each month of the quarter, January RevPAR was $163.59, up 1.4% to January 2025, with occupancy flat and ADR up 1.4%.

February RevPAR was $216.11, up 4.8% compared to February 2025, with occupancy down 40 basis points and ADR up 5.4%. March was the strongest month of the quarter across all three metrics with RevPAR of $239.80, up 14.3% compared to March 2025, with occupancy up 540 basis points and ADR up 6.5%.

Group business continued to maintain its recent strength during the quarter with group rooms revenue up over 7%, reflecting strength in group business that is expected to continue to improve throughout the rest of the year. Overall for the quarter, group room nights were up 2.5% with ADR up 4.4%.

Business levels grew for each night of the week during the quarter compared to the first quarter of 2025. Occupancies grew by 210 basis points on weekdays and 110 basis points on weekends, with ADR growth of 4.5% on weekdays and 5.3% on weekends.

RevPAR on Wednesday nights was up a notable 11% for the quarter. Leisure business during the quarter was consistent across the large resorts in the portfolio with significant increases in leisure business at Grand Hyatt Scottsdale and Hyatt Regency Grand Cypress, as well as strength at Park Hyatt Aviara, which lapped a difficult comparison to the first quarter of 2025.

At our smaller leisure-focused hotels, leisure business grew significantly at Andaz Savannah, Royal Palms, and Kimpton Canary Hotel Santa Barbara. Now turning to expenses and profit, first quarter same-property hotel EBITDA was $87.8 million, an increase of 17.9%, driven by a total revenue increase of 7.3% compared to the first quarter of 2025, resulting in 270 basis points of margin improvement.

Our operators are now able to better control expenses in a more stable occupancy and a growing rate environment. For the 30 same-property portfolio, food and beverage revenues increased 6.2% in the quarter as a result of nearly 11% growth in banquets, while outlet growth declined slightly, primarily as a result of outlet closures at W Nashville during the quarter.

Other operating department income, including parking, spa, and golf revenues, grew by approximately 13%. Rooms expenses were well controlled, increasing 2.3% on a per occupied room basis, while F&B profit margin improved by approximately 150 basis points.

A&G grew by approximately 4.5%, while sales and marketing expenses remained flat during the quarter, in line with recent trends as strategies have been refined and focused across the portfolio. Property operations and maintenance expenses grew by just 1.3%, due primarily to lower general expenses, while energy expenses across the portfolio grew at over 9% due to significant winter storms, which drove higher costs, especially for gas.

Turning to CapEx, during the first quarter, we invested $15.2 million in portfolio improvements. We completed two projects during the first quarter, including the guest room renovation at Fairmont Pittsburgh and a renovation of the M Club at Marriott Dallas Downtown.

More significantly, we reconcepted the food and beverage facilities at W Nashville pursuant to our previously announced agreements with Jose Andres Group, which JAG now operates under licenses to essentially all of the hotel's food and beverage outlets. These outlets include Zaytinya, an Eastern Mediterranean concept serving lunch and dinner; Bar Mar, a coastal seafood and premium meat dinner concept; Butterfly, a high-energy rooftop bar with a Mexican-inspired menu; and Glowbird, a new pool deck concept with an expanded bar and upgraded food and beverage offerings.

All reconcepted outlets opened in the first quarter with the exception of Glowbird, which opened in late April. These projects were completed on time and within budget.

These outlets are truly beautiful and significantly upgrade the F&B offerings at the properties by menus ideally matched to the market. Each outlet is off to a great start, and we look forward to sharing future progress with you.

Our in-house project management team continues work on two important guest room and corridor renovations that are expected to begin in the fourth quarter at Andaz Napa and The Ritz-Carlton Denver, as well as ongoing work upgrading our hotels' infrastructure through physical plant and facade upgrades at 10 hotels this year. With that, I will turn the call over to Atish.

Thank you, Barry. I will provide an update on our balance sheet and our current 2026 guidance.

At quarter end, we had approximately $1.4 billion of outstanding debt. Just over three quarters of our debt was at fixed rates, inclusive of hedges.

Our weighted average interest rate at quarter end was 5.5%. Additionally, at quarter end, our leverage ratio, as defined in our corporate credit facility, was approximately 4.8 times trailing 12-month net debt to EBITDA.

We expect our leverage ratio to further decline as Grand Hyatt Scottsdale stabilizes in the next couple of years. Our long-term leverage target is sub-4 times net debt to EBITDA.

As a reminder, we have no preferred equity or senior capital. During the quarter, we paid off the $52 million mortgage loan at the Grand Bohemian Orlando with cash on hand.

We also resized the Andaz Napa mortgage loan with a $6.3 million principal payment in March, thereby bringing the loan back into covenant compliance. In total, 28 of our 30 hotels are free of property-level debt, representing a source of balance sheet strength.

Our debt maturities are well laddered with a weighted average duration of over 3 years. Our available cash at quarter end was over $100 million, and our $500 million line of credit remains undrawn.

As such, total liquidity was over $600 million at quarter end. In April, we paid a first quarter dividend of 14 cents per share.

If annualized, our current yield is over 3%, assuming this level of dividend is maintained. Turning next to our current 2026 guidance that we issued this morning.

Based on the first quarter outperformance, we've raised our full year outlook. Our overall expectations for the second quarter through year end are roughly in line from where they were when we last issued guidance about 2 months ago.

In specific, our RevPAR is expected to grow between 2.75% and 5.25% for the full year. This is an increase of 100 basis points at the midpoint.

Total RevPAR is expected to grow between 3.75% and 6.25% for the full year. This is an increase of 75 basis points at the midpoint from prior guidance.

While total RevPAR growth was healthy in the first quarter, we saw more growth on the room side, particularly in the month of March, which is the reason for the larger increase in our RevPAR outlook. Our adjusted EBITDAre guidance has increased by $6 million to $266 million at the midpoint.

The $6 million increase is a combination of a $7 million increase to hotel EBITDA, driven by top line, offset by $1 million of higher G&A expense. As we look ahead, we are seeing strength in transient and group demand across the portfolio, including in many of our urban markets.

As Marcel and Barry each discussed, that strength has been broad, and we expect it to continue. Based on our preliminary estimate of April RevPAR, our March-April blended RevPAR increased in the teens percentage range at many of our business transient and group-oriented hotels, such as Hyatt Regency Santa Clara, Waldorf Astoria Atlanta Buckhead, Kimpton Hotel Kimpton Palomar Philadelphia, The Ritz-Carlton Denver, and Westin Galleria and Oaks in Houston.

Offsetting this higher expectation and the reason why our remainder of the year outlook has not changed much is that we are now expecting less of a boost from special events. Specifically, we're trimming our prior expectation of 75 basis points of RevPAR growth from special events to a range of between 25 and 50 basis points.

While demand for the NFL Draft in Pittsburgh was strong and we expect America 250 demand to benefit D.C. and Philadelphia, our growth expectation for the FIFA World Cup has come in.

Six of our hotels are expected to benefit from the FIFA World Cup, but the degree of benefit varies considerably. Our hotels in Atlanta Buckhead and Philadelphia should do well, but our hotels in Houston, Santa Clara, SFO, and Dallas are less likely to see a strong boost.

Given that our assets in Atlanta Buckhead and Philadelphia are smaller than those in the other markets and represent about 5% of our total room base, the benefit is expected to be more limited than previously expected. To provide a bit more color as we look by segment, on the group side, there has been wash on the group blocks over the FIFA World Cup event period, such that about half the prior group business booked currently remains on the books.

As such, these six properties will be more dependent on transient demand than expected. In terms of occupancy and rates on current definite business, and this is for both group and transient on game days at the six hotels, less than half of our inventory is booked, with more than half remaining to be booked.

Some hotels are loosening restrictions, including minimum length of stay requirements. ADR for the business that has booked is up about 50% versus last year.

Now this is likely to come down as we get closer to the event, but is obviously a good sign. In addition, our expectations regarding the days before and after game dates have also come in as definite business on those dates is a bit softer.

Moving ahead to our earnings cadence by quarter, I want to take a moment to provide this info to assist with your modeling. We expect full year adjusted EBITDAre to be weighted across the remaining quarters as follows: second quarter in the high 20s percentage range, third quarter nearly 20%, and fourth quarter in the low 20 20s percentage range.

On margins, we are now expecting margin expansion for the full year, which is up from our prior expectation for a margin decline. For the full year, we expect cost per occupied room to grow in the mid-2% range, which is below our prior estimate of 3%.

Our operators are doing a better job at managing expenses than expected, and we have confidence that the rate of expense increase that we've experienced over the last several years will continue to decline as we look forward. Our AFFO per share forecast is increased by 6 cents to $1.94 at the midpoint.

As projected, this would make for another year of double-digit percentage growth in FFO per share. Our estimates for capital expenditures, income taxes, and interest expense are unchanged.

Turning ahead to group room revenue pace for our 30 hotels, our group room revenue pace continues to be healthy. As of the end of the first quarter, group revenue pace for May through December of this year was up approximately 6% compared to the same period in 2025.

For the second half of this year, group pace was up about 9%. Excluding Grand Hyatt Scottsdale, group pace would be about 100 basis points lower for each period, and that reflects several properties across the portfolio having strong pace growth.

Group production was solid in the first quarter. First quarter group room revenue production for May through December increased about 5% compared to production for the first quarter of 2025 for that same May through December period.

For the May to December period, over 80% of our projected group business for these months is definite. In summary, we are very pleased with the strong start to 2026.

Our portfolio is performing well across both group and transient segments, our balance sheet provides meaningful financial flexibility, and our team and operating partners are executing at a high level. With that, we will turn the call back over to Reagan to begin our Q&A session.

Thanks. Good afternoon, everyone.

Afternoon.

First, I just want to start on the demand front. Can you talk a little bit more about the urban improvement that you saw?

Was that business or leisure picking up? Any specific markets or comments to add some color there would be helpful.

Yeah. I think when we think about urban, a lot of that is more near-urban or suburban than truly downtown CBD windows across the portfolio.

I think what we saw certainly in the quarter and continuing to see into the second quarter is improvement in both corporate demand, certainly on weeknights. I talked about Wednesday night demand being up 11% for the quarter in terms of 11% in terms of demand, which is very significant obviously.

I think we were pleasantly surprised to see across the portfolio a relatively even mix between what weekdays were up and what weekends were up. As well as the things we look at as the primary determinant of how much is really being driven by business versus how much by leisure.

We've seen growth certainly in both segments. Group, we always knew would be strong.

I think we had a lot of hope heading into Q1 that negotiated corporate demand would continue at the levels it had been growing in Q4. That certainly continued.

I think we had, as I think we all mentioned in our remarks, some higher-than-expected growth in leisure in particular, both in the resort-oriented properties, but as well as in our smaller drive-to leisure-focused properties as well.

That's helpful. Then just one more, probably for you, Barry.

Just the Hyatt loyalty program changes and the different tiering now, what's your take on how that might impact demand and RevPAR for several of your bigger Hyatt resorts that presumably get a lot of redemption business? Thanks.

Yeah. Thanks, Mike.

We're still looking through, and obviously looking at that on a property-by-property basis. Some of these we've been aware of or anticipating for a little while.

Some of them are changes that we actually had recommended as it relates to our portfolio, we have a couple of large assets that had very low redemption rates, and we'd look to the increase in category changing that dynamic. It's really too early for us to put that into anything definitive.

We certainly overall, we view the change as positive for our larger resorts.

Okay. Thank you.

Thank you. Maybe first just a clarification on the special event changes.

Does the 25 to 50 basis points assume any kind of uplift from the World Cup? Then just related to that, where do you think the softness is coming from?

Is it on the international side or is it broader based than that, you think?

To answer your first question, there is an assumption that we do have some lift from World Cup. Obviously, the three big events, NFL Draft, America 250, and World Cup, were all factored into the initial 75 basis point lift, and we've reduced that to 25 to 50.

We do still expect World Cup to be beneficial in all of the markets, frankly, that we've talked about in the past, including those six hotels. Just not as beneficial as previously expected.

Now digging a little bit deeper, I think the one thing we can see with more accuracy is the group sizing and the group blocks. Obviously, as I mentioned, that's washed.

We have about half the level of group on the books for that period than we did several months ago. That's the piece that has washed.

As I mentioned, we're more dependent on transient, and that's just more uncertain. That's why we're both giving a range, because we're not really going to know that number until we get much closer.

There is definitely going to be some variation in performance based on what the actual teams are and how that lines up. Again, I think that's really what's causing our view to come in on World Cup.

It's really just less visibility and more uncertainty around what actually may materialize. With regard to domestic versus international, I'm just not sure we have enough data and information on that at this point.

Certainly, there's still a lot of confidence that these games are going to be big drivers of inbound activity. Again, we're not quite seeing that in the booking activity to date.

As we get closer, we just want to be very precise about what we are and aren't seeing. I think the bigger story is that we've obviously not adjusted our overall guidance downward.

We're seeing business more broadly that's making up for the special events coming down, which, frankly, gives us a lot more confidence because that's business that's likely more durable and business that may continue into the fall and into next year as opposed to one-timer-type business.

Thanks for that. Then maybe shifting gears a little bit.

Marcel, you talked a little bit about that transaction market's opening up. I guess it's been a few years since you've done an acquisition.

I believe the last two new hotels were new hotels and new to Xenia markets. When you think about potential acquisitions moving forward, is there any preference to kind of follow a similar pattern of new markets and newly developed hotels, or is it just really about the opportunity?

It's really about the opportunity. Obviously, if you look at kind of what some of the most successful acquisitions are that we did essentially over kind of a 5-year timeframe pre-COVID, all of them really were branded hotels with good demand segmentation, good group component to them.

In many cases also some properties that did require some initial CapEx, whether that be a room renovation or the common spaces. I think that's probably where our preference would lie, but it's, to your point, it's really going to be dependent on the opportunity set.

We're not really going to limit ourselves to saying we need to be in X, Y, or Z markets. It's really going to be as long as it fits with our overall long-term strategy, we're open to adding some hotels in certain markets where we are already.

We certainly would be open to some markets that we're not in yet.

Thanks for the color.

Great. Thanks.

Atish, just wanted to go back to your comment on the durability of some of the regular way business, and then the upward RevPAR growth guidance revision. The guidance increase was simply flowing through 1Q, that was then partially offset by a tweaked downward from World Cup contribution, but you didn't flow through that regular way strength of the midweek business you cited through the balance of the year.

Is that correct? No,

not quite. The guidance increase reflects first quarter and a smidge more.

That's really the change to RevPAR and the change to EBITDA. What I was trying to say is even though our expectation for World Cup has come in, there's other business that we're expecting that over the course of the year that will make up for that.

Really that's kind of how you should think about it, that the guidance increase was first quarter. Any softness we're seeing on the World Cup, we're making up for that across the business, across the portfolio and with our big segments, BT and group.

That's the piece that gives us sort of confidence as we look forward, even past this year, because obviously so much of our business is BT and group. Those are the biggest pieces of the pie as opposed to leisure or events specifically.

Understood. Then just switching gears, going back to the commentary on the transaction market.

I guess, Atish, Marcel, as you think about potential opportunities out there to acquire or transact, how are you thinking about funding? Is there anything across the portfolio that you're seeing a good opportunity maybe to reshape the portfolio or sell maybe something with a little bit slower growth or CapEx needs?

Is there anything today that you're looking to test the waters a little bit on the marketing side to fund any future acquisitions?

Obviously, as we're talking about the overall transaction market, my commentary is really around the fact that we are seeing some more assets that could be interesting and they are building a bit more of a pipeline. We're still going to have to be very mindful of our overall different ways to allocate capital, obviously.

We've paid down some debt like we did earlier in the year. Obviously, we were very active buying back stock last year.

It still would have to be something that really is additive to the portfolio, gives us better growth going forward, long-term continues to improve the quality of the portfolio. It's not to say expect some kind of flood of acquisitions coming up, obviously.

As far as the funding element of it, as Atish pointed out, we have about $600 million of liquidity through both cash on hand and our fully undrawn line of credit. That's available as a potential source.

Obviously, we could look at property-specific financing too, to the extent that that's something that looks appealing. On the disposition side, really think about it in kind of a continuation of what we've done throughout our history.

We're certainly looking at a few hotels where we think we may want to potentially sell those, the relatively near to medium term when there are some significant CapEx coming up where we don't feel we're going to get the appropriate return. That's not going to be any kind of seismic level of volume that we would be doing.

That's just around the margin because we've clearly fine-tuned the portfolio quite a bit over the last several years. Over the last decade really.

Very helpful. Thank you for the time.

Thanks for taking the question. Maybe one on just because you have the upcoming renovation at the Andaz Napa, maybe just touch on that market and that hotel specifically on how it's performing and the outlook there given broader Northern California has been performing pretty well so far in the year.

As I think it's been a very good performer for us for this year will be our 13th year of ownership of that hotel. It's been a good performer.

It's certainly well located within downtown Napa, and downtown Napa has experienced tremendous growth over that period of time in terms of amenities and tasting rooms and things like that. The Napa market overall has certainly been a little bit challenged.

We think we're at the right price point in that market because we offer a high-end product at a price point below some of the more resort-oriented assets. Having said that, the wine business has struggled a lot this year, both on the commercial side, which we play quite a bit in, in terms of serving the wine industry itself and people that come to visit and do business in Napa.

We're certainly seeing some renewed strength in the leisure market, in part due to growth coming out of San Francisco. More people being in the city obviously means more people taking time to do add-on, pre and post downtown San Francisco visits to the hotel.

It's an asset we believe in, which is why we had committed to this renovation over a year ago, and then put it on hold for a year as a result of concern over tariffs and tariff impact. It's been a good performing hotel for us, continues to be so, and look forward to getting it in the top shape post the renovation.

Thanks. Maybe follow-up just a broader big picture question similar to Ari's question earlier.

Just taking a step back from the quarter, just can you touch on what markets in your portfolio specifically you're expecting to kind of benefit over the next 3 to 5 years from the low supply environment? On the flip side, any markets like Nashville or others that you're watching that maybe new supply over the last few years has impacted the portfolio?

I'll start. I think certainly we have expectations for continued growth in Northern California.

They're talking about Andaz Napa, Marriott San Francisco Airport, and Hyatt Regency Santa Clara. We talked about Napa, but we continue to see growth and recovery in corporate transient demand clearly through the Bay Area in general, but in particular in Santa Clara, which has become kind of one of the hubs and focus given its Silicon Valley location for all the AI activity that's gone on.

The hotel is showing pretty remarkable year-over-year growth, even ex the benefit we had from Super Bowl in Q1. I think longer term, many of our assets are in markets that have a lot of protection from supply.

When I think about some of those markets, I think about Atlanta. I think about Houston to a lesser extent, but assets that are the quality assets within each of those markets, both in the Woodlands and Galleria.

We feel still really good about growth and recovery in the Phoenix and Scottsdale markets, both related to general market conditions and market recovery, but in addition related to obviously the growth we're going to continue to get as Grand Hyatt Scottsdale ramps back up. I think those touch certainly on a few of those.

As it relates to Nashville, obviously, as there has been very significant supply additions over the past several years. It's certainly not completely ended.

There have been some things announced that will be added to the supply over the next several years. It has certainly slowed from kind of the peak of when a lot of new supply came in.

We've talked about that before. That has certainly made it a little bit tougher for us in the early going because the market really needed to absorb a lot of this new luxury supply that has come in over the last several years.

We expect that absorption to continue over the next several years because there's still a lot of very positive momentum in Nashville on the demand side as well. Yes, there is some more supply coming, but I think we feel like we're going to be pretty well positioned to deal with that over the next several years.

Yeah.

Thank you.

Hey, good afternoon, and thanks for taking the question. You touched on it briefly, but could you walk us through how you're thinking about the best uses of incremental capital right now given where your shares are trading?

Would you say that repurchases are likely still the top of that list, or is there more debt you'd like to pay down or maybe another big ROI project that you'd like to pursue?

Thanks for the question, Jack. I think we take a balanced approach.

Obviously internal growth, external growth, share repurchases, debt reduction, you've seen us do all of that over the last several years. It's going to vary a little bit based on what we see in terms of outlook, what we see in terms of opportunities, certainly share price.

It's hard to give you a definitive priority because it does change. I would say a few things.

One, the portfolio is generally in really good condition. We've put capital behind the portfolio over the last several years, done some big renovations.

We have kind of CapEx coming down now to more of a normalized level. That's one.

Two, you've seen us pay down some debt, and as I mentioned, we feel like we'll naturally deleverage over time here as Grand Hyatt Scottsdale picks up. There's not sort of an immediate pressure to pay down debt, but certainly having a little bit more dry powder and resources would be good, particularly as we expect the transaction market to loosen over the next several years.

Then finally on the share repurchase side, as you mentioned, we bought a lot of stock back last year, almost 9% roughly 9% of the company. We feel really good about those purchases given where the stock's trading now.

We obviously felt like that was the right thing to do, and we continue to trade below NAV. It's not off the table.

I just think we're going to balance all of those various things to drive the strongest returns and the best capital allocation for the owners of the company. That's really something we've done pretty consistently since we've been public over the years, and we've kind of played in all of those various areas depending on the timing to drive long-term shareholder returns, and that continues to be the mantra and the focus.

No, that's really helpful. Then one on the W Nashville.

Obviously, some really exciting stuff on the horizon there with the new F&B offerings. Can you talk to us a little bit about how you're thinking about how the asset is positioned in that market, and when we might see it return to RevPAR growth, and how you're thinking about where it's going to stabilize in terms of earnings, and how long it'll take to get there?

Sure. I I think in terms of the market and smarter positioning, the the hotel and the submarket of the Gulch continues to come into I think better focus and has become a more desirable destination even in the couple of years, the few years that we've now own owned the asset.

I think what you see is obviously people choosing to stay in the Gulch as opposed to staying out of kind of the the melee of of Broadway if they're there for leisure. It's a very It's an upscale, residential-style neighborhood.

I think people really like what the other attractions and amenities are. I think, as we've talked about before, the in terms of corporate demand, that I think the corporate market really recognizes it as the top tier Marriott hotel to stay in within the submarket and has been able to capture a lot of longer-term traditional kind of consulting and accounting firm consulting-type business, which has been great for the hotel.

It continues to be a good, strong leisure destination, and the hotel's figured out, and continues to figure out, really how to how to balance group within the hotel. We think the the outlets, the new outlets give us a great opportunity to sell a little more into the private dining market, which the small groups that favor our hotel seem to really enjoy the opportunity to enjoy the Jose Andres custom banquet menus within the hotel's environment, whether in the private dining rooms, the restaurant, or within the meeting space itself.

On the financial side of it, I think we spoke about this a little bit last quarter, too. We expect, through this change in in the outlets, incremental EBITDA somewhere between $3 and $5 million over time.

That's not going to happen overnight, but it is really based on not only, certainly, greater revenues and getting and getting some profitability out of the actual outlets, but it's also about continuing to improve the appeal of the property and getting, the type of customers that Barry was talking about. We think that getting that incremental EBITDA will get us somewhere in the low 20s over time million of EBITDA.

Again, that's it's hard to put a exact timeline on this because it's really something that's kind of needs to start building upon itself as as the reputation of of the property grows.

Really helpful. Thanks for the color.

Great. Thanks for taking the question, guys.

I'm on for David, but just wanted to dive into kind of the state of the union for luxury and upper upscale. I know over the last couple months, we've heard a lot about the K-shaped economy, and this week, we got a little bit of commentary around kind of the C-shapes economy suggesting some deceleration at the top end.

Just wanted to get your reaction there and any commentary you can provide. Thanks.

What we've obviously seen is that luxury and upper upscale continue to perform really well. Clearly, you've seen it in our portfolio being 100% focused on luxury and upper upscale.

We've seen very good growth in group demand over the last couple years. Certainly, that's going to at some point start leveling off a little bit.

Simultaneously, now we're starting to see some pretty good momentum on the transient side, and particularly on business transient continuing to build. If you look at the supply backdrop for luxury and upper upscale, it's still extremely benign for the next several years.

It's setting up pretty nicely for not only the industry overall with supply growth being pretty modest, but particularly in our segments, too. We talked about it quite a bit today.

We'd be seeing a lot of strength in all these different demand segments. Certainly, the higher-end consumer doesn't seem to be pulling back yet.

We're pretty optimistic that that will continue going forward.

I would also add, these properties, as we've demonstrated over the last couple years, have a lot of levers to pull, and in terms of driving food and beverage and ancillary revenues. We've been able to optimize them over the last couple years, and we think it speaks well to where the consumer's headed, and our ability with these properties to keep driving cash flows in this environment.

We really saw a lot of strength in the quarter, and even subsequent to the quarter, nothing changing. The trajectory looks quite strong.

Great. Thanks.

That's all for me.

Thanks, Reagan. Thanks, everyone, for joining us today.

Appreciate the interest. Appreciate the questions.

Obviously, it was a great quarter for us, and we look forward to the rest of the year. Look forward to seeing many of you at various conferences coming up.

Thank you for being as attentive as you were today after many hotel earnings calls over the last couple days. With that, we'll conclude our call.