Release Date: February 25, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you provide more insight into the RevPAR forecast, especially considering the strong group pace and improving business transient? A: Marcel Verbaas, CEO, explained that while the group base is strong, representing about 30% of their business, the economic climate creates uncertainty in other segments. They are seeing improvement in corporate transient demand but expect leisure demand to lag. The guidance reflects confidence but also caution due to uncertainties in these other segments.
Q: How much is Scottsdale expected to contribute to EBITDA in 2025, and has the timeline for stabilization changed? A: Marcel Verbaas, CEO, stated that Scottsdale is expected to take about three years to stabilize, with EBITDA in the low $20 million range this year, moving to low $30 million next year, and reaching stabilization in 2026. The strategy focuses on improving the business mix from 2019 levels, with the expanded Arizona Ballroom being a key component.
Q: Can you expand on the softening group demand outside urban and suburban locations? A: Barry Bloom, COO, noted that markets like Orlando and Park Hyatt Aviara in Carlsbad saw less robust group demand in 2024 compared to previous years. This was partly due to a shift in demand patterns post-COVID. However, both properties have strong group prospects for 2025, returning to a more balanced mix of corporate and association business.
Q: How are loyalty costs impacting margins, and what can be done to mitigate these pressures? A: Barry Bloom, COO, explained that loyalty costs are driven by increased volume rather than higher costs per room. The company benefits from brand loyalty programs, which drive business but also incur costs for providing points. Some brands are lowering these costs, but the increase in out-of-room spend also contributes to higher loyalty expenses.
Q: What are your assumptions for the West Coast markets in 2025? A: Barry Bloom, COO, expects continued growth in Northern California, particularly in business transient demand at Marriott San Francisco and Hyatt Regency Santa Clara. There is also anticipated recovery in leisure assets in California, such as Napa and Santa Barbara, and strong group prospects at Park Hyatt Aviara.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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