Greetings and welcome to the Apple Hospitality REIT Second Quarter 2018 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Kelly Clarke, Vice President, Investor Relations. Please go ahead.

Thank you and good morning. We welcome you to Apple Hospitality REIT's second quarter 2018 earnings call on this the 7th day of August, 2018. Today's call will be based on the first quarter 2018 earnings release, which was distributed yesterday afternoon. As a reminder, today's call will contain forward-looking statements, as defined by Federal Securities Laws including statements regarding future operating results. These statements involve known and unknown risks and other factors, which may cause actual results, performance, or achievements of Apple Hospitality to be materially different from future results, performance, or achievements expressed or implied by such forward-looking statements. Participants should carefully review our financial statements and the notes thereto, as well as the risk factors described in Apple Hospitality's 2017 Form 10-K and other filings with the SEC. Any forward-looking statements that Apple Hospitality makes speaks only as of today, and the Company undertakes no obligation to publicly update or revise any forward-looking statements, except as required by law. In addition, certain non-GAAP measures of performance such as EBITDA, adjusted EBITDA, FFO, and modified FFO, will be discussed during this call. We encourage participants to review reconciliations of those measures to GAAP measures as 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; Krissy Gathright, our Chief Operating Officer; and Bryan Peery, our Chief Financial Officer will provide an overview of our results for the second quarter of 2018 and an outlook for the sector and for the Company. Following the overview, we will open the call for Q&A. At this time, it is my pleasure to turn the call over to our CEO, Justin Knight.

Thank you, Kelly, and good morning. Hotel operations for our portfolio remained solid during the second quarter of this year, with comparable hotel's RevPAR growth of 1.3% for the quarter and 1.1% for the first half of the year. Although there is increased geopolitical uncertainty, macroeconomic trends within the US remained strong and unemployment levels continued to indicate a robust workforce. Amid this steady economic growth environment with high occupancy levels and a tight labor market, we remain focused on driving rates and cost effective operations. We are pleased with our ability to achieve a strong hotel EBITDA margin of 40% for the quarter and 38% for the six months ended June 30. As a result of increased demand related to hurricane recovery and restoration efforts in Houston and Florida from September through the end of 2017, we expect challenging year-over-year comps for the later part of this year. However, we remain confident in the full year 2018 guidance we provided with our year end 2017 earnings. In addition to our focus on operations, we continue to refine and strengthen our portfolio of hotels through meaningful transactions and renovations that feel will enhance shareholder value over the long-term. Since the beginning of the year, we have acquired four hotels for an aggregate purchase price of approximately $137 million. The Hampton Inn & Suites, Memphis-Beale Street and the Hampton Inn & Suites, Atlanta Downtown, both in exceptional locations were acquired during the first quarter of this year. We anticipate that the new management teams in place and significant renovations planned for 2019 will further enhance the competitive position of these hotels within their respective markets. On May 2, we acquired the newly built Hampton Inn & Suites, Phoenix Downtown. This exceptionally well located hotel has exposure to a wide variety of…

Thank you, Justin. As anticipated our RevPAR growth improved from the first quarter to the second and we were very pleased to achieve an industry leading 40% comparable hotel EBITDA margin. Our weekday RevPAR grew more than weekend RevPAR, consistent with the sustained modest improvement in business trends and demand and our operators ability to drive higher rate growth peak occupancy mid week nights. Our overall occupancy remains strong at 81.8%, with increased rates accounting for substantially all of our RevPAR growth. From a monthly trend perspective RevPAR growth for April and June were largely on target with expectations. While less than expected transient pick up in the latter part of May surrounding the Memorial Day holiday resulted in RevPAR growth lower than forecast. To help boost demand over holiday time periods, we are working with our operators to increase marketing spend, targeting holidays moving forward. And although group represents only about 15% of our mix, our asset management team continues to work with our operators to strategically target additional group bookings when needed to compress the hotels, especially on the weekends, shoulder nights and holidays when demand for business travel is lower. While performance continues to vary widely across our geographically diversified portfolio, the number of hotels with RevPAR growth has remained relatively consistent with the prior year. 57% of our hotel had increases in RevPAR for the first half of the year, compared to 56% over the same period in 2017. For the quarter, our markets with stronger performance included Knoxville, Houston, Miami, Fort Lauderdale, Norfolk Virginia Beach, Arlington Fort Worth and Montgomery. Markets with lagging performance included Seattle, Richmond, Dallas, Denver, Austin, Boise and Kansas City, primarily as a result of ramping new supply. Four of our Dallas market hotels also underwent a management transition in the…

Thanks Krissy and good morning. I'll quickly summarize a few numbers for the quarter. Total revenue was 345 million, an increase of 4% from the second quarter of 2017. Adjusted EBITDA was 131 million; also an increase of 4% from last year and modified FFO per share was $0.51, flat to the second quarter of 2017. Year-to-date through June, revenue was $643 million, an increase of 3% from the same period in 2017. Adjusted EBITDA was 231 million, a 3% increase and modified FFO per share was $0.89 down one penny from 2017. Year-to-date, we have made approximately $31million in capital investment and anticipate an additional $35 million to $45 million throughout the remainder of the year. As Justin mentioned, we recently completed the refinancing of over 1 billion of our credit facilities. We very much appreciate the support of our lenders and believe we were once again able to create value for shareholders due to the portfolio we have built and the philosophy under which we operate the company. The new facilities effectively extend the maturities of the previous facilities, spread the maturities, reduce applicable spreads and provide additional flexibility in terms. After giving effect to the new facilities, the weighted average maturity of our 1.4 billion of outstanding debt is six years with a current weighted average interest rate of 3.7%. The weighted average maturity of our effectively fixed REIT debt currently 80% of our outstanding debt is five years with a weighted average rate of 3.9%. During the second quarter we recorded $3.1 million impairment charge related to the disposition and potential disposition of three hotels, 0.5 million related to the sale of two hotels, the SpringHill and TownePlace Suites in Columbus, Georgian, both classified as held for sale at June 30 and sold in July and…

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Our first question comes from Austin Wurschmidt with KeyBanc Capital Markets. Please go ahead.

Hi, good morning everyone, so wanted to touch first on the acquisitions. I mean, you've discussed interest in adding the Hyatt brand to the portfolio for some time and first just curious why now? And then secondly I guess how do you plan to gain scale in Hyatt brand hotels and what would you considered to be a sufficient scale I guess to benefit from the operating and purchase efficiencies that you've talked about?

Good morning, Austin. I'm happy to talk about the Hyatt brand. As you know we've been discussing and investigating potential addition of a Hyatt select service brand to our portfolio for some time. We've been attracted really largely because of the quality of the product. The Hyatt brand itself has broad recognition, but have been limited to date by availability of assets really. As you highlighted we've always wanted to have scale ownership of the brand so that we get benefit from our ownership in the same way we benefit from our ownership of Hilton and Marriott select service brands. There are a few things that we like about this particular transaction; one, the locations is exceptional. And I think that combined with what we feel will be an exceptional product delivered by the same group that delivered our recent Arizona, Phoenix acquisition, we think will be a good combination for us. The fact that the property comes online in 2020 also gives us additional time to build out a pipeline of assets and to establish the scale ownership that we'll need. For us a target round number would be tenish asset within the brand at which point we feel we could fully benefit, remembering again that there will be some benefit that we'll have because of the similarities between these brands and the Marriott and Hilton brands that we already own. The Hyatt brands are attracted to us from a development standpoint just because they aren't as fully built out and it's not coincidental that our entry into the Hyatt brands coincides with a reemphasis and increased focus by Hyatt on the development of these specific brands. But there are a tremendous number of sites available for us to build out where we're beginning to see some saturation on the development side within the Hilton and Marriott select service brand families. As we look to acquire existing assets, we feel that there's margin opportunity that will help us to also improve and to add value to those assets over time, so from an expectation standpoint over the next two to three years we'd hope to be - to own in the neighborhood of ten assets within the Hyatt brands and we'll see how things work from that.

So again - I appreciate all the detail there and given kind of this limited exposure and you mentioned some margin opportunity, but given as I said your limited exposure, do you require premium yield on these or do you think that you've identified enough of the opportunity and the margin that will drive enough of a return as you look to enter the - or add this brand additional assets in this brand?

I mean because we feel there's - so and again it depends on whether we're building these assets or whether we're acquiring existing assets. Big time we're acquiring existing assets, we've spent a tremendous amount of time with our operators many of whom operate Hyatt brands and feel that we've identified areas of opportunity which will enable us to enhance margins. I think are going yields, expectations would be similar. But we would feel there would be incremental upside as we achieved margin improvement in those assets. As we look at development yields we've been working closely with Hyatt on incentives that the brand might be willing to offer to help us overcome somewhat of a hurdle in the early years as we ramp and develop the hotels.

Thanks and then just one on operations, you mentioned you've seen increases in demand in reference that weekday RevPAR is now outperforming weekend, but I guess RevPAR overall is still tracking fairly stable I'd say versus last year and so maybe what's kind of holding back from driving stronger ADR growth or maybe an acceleration in RevPAR growth, any thoughts there?

Absolutely, good morning, Austin, so I'll talk a little bit in general about the broader markets and then I'll give a little bit more detail on specifics of markets. So in our results actually our top 20 EBITDA markets underperformed the markets outside of the top 20 s money and within the top 20 there were seven markets that actually in the quarter supply exceeded demand. It is important to know that demand is growing in each and every one of those markets and we feel good about the long-term, but RevPAR growth will be impacted in those markets until the new supply is absorbed. And a good example just to drill down on that would be Seattle, so Seattle we own three properties and in individual sub markets there's different performance. Is still very strong with the Boeing business and government business, it's less impacted by new supply. Lake Union is - we have a resonance in there is Seattle's fastest growing neighborhood, so you have Amazon's urban campus which continues to grow, Google's new building is under construction two blocks from our hotel. The convention center is being expanded and will double in capacity by 2021. The Seattle Central Business District demand is still very healthy and during the quarter the demand was actually 4%, but the supply was 7%. Our occupancy was still very strong at 91%, but that was a 3% decline year-over-year and rate was still strong $250, but that was 2% down for a total RevPAR decrease of 5%. But if you look at some of the individual sub markets there's often some unique stories in there, so Dallas is one of our larger markets. If you look at Downtown, Downtown was very strong, strong group business, good city wide, it was up 15%.…

Great and a lot of great detail in there, I appreciate the color. Thank you

Thank you

Our next question comes from Anthony Powell with Barclays. Please go ahead.

Hi good morning everyone.

Good morning.

Good morning, just another question on RevPAR, so you mentioned that your weekday RevPAR out performed your weekend RevPAR. Going back to your expectation as of May, did your weekday RevPAR meet your expectations and the softness really was concentrated on weekender or did they kind of both kind of underperform a bit relative to what you were hoping for?

They both underperformed a bit relative to what we were hoping for because that whole week around the Memorial Day week we just - we didn't have the business travel and we weren't able to - with the less - with a slower than expected transient pick up going into the month the forecast was very strong and then just as we got closer and closer transient business just didn't pick up.

Got it, we saw the impact seems to be getting a bit larger every year Memorial Day July 4, what can you do or what can your operators do to kind of mitigate that besides adding a - adding group business there? Marketing maybe needs to be done, maybe some more pricing, what's the strategy to kind of mitigate these holiday shifts?

Yeah, all the above, so one of the things that we can and what we're focusing on and what we're doing with our management teams that - we saw the Memorial Day, you're going to hear it again on July commentary because July was - the first week of July was weak, it should improve next year because of the - this year July actually fell on a Wednesday, which completely destroys business travel. But what we can do is that we can increase usual spend targeting the holidays, we can also strategize their management teams for future and upcoming holidays to make sure that they are - where they have opportunity, to be aggressive on layering on groups especially since we have seen a trend with the shorter booking window - makes a little bit harder to forecast too, the booking continues to compress, but we have seen that trend in drop off around this holiday time periods. The hotels that did the best over the holiday time period did do a better job of being protective and going out and layering on additional group base or other negotiated base, so that is one thing that we are definitely focusing on moving forward. Even if at the end we sacrifice a little rate in doing so, we think it better protects us and it often helps us better manage expenses and things like that as well.

Thanks and on the margin side, margins did better than you would expect given the 1.3% RevPAR growth. I know you said before that you really need kind of two or higher to really maintain margins, but is there a way to keep this margin performance given the given the lower RevPAR growth that they were expecting in the back half of the year.

We are going to continue to do our best. As you said we were very pleased with the results and we're very excited to see some of the efforts pay off. Now at some point the toughs become - I mean, the comps become tougher and but our goal is to continue to try to do our best to at most have a 3% payroll increase per occupied room year-over-year. We will continue to focus on multiple different areas. We're going to continue to push and we do think there's additional upside on the other income side with our managers to continue to increase the cancellation revenue and eventually Hilton actually before Marriott. The brands will be helping us with that by automating the collection or - not the collection of it, but automating the processing of it, so it's a less cumbersome process.

Alright, that's it for me, thank you.

Thank you.

Our next question comes from Michael Bellisario with Robert W. Baird. Please go ahead.

Good morning everyone.

Good morning.

One last one on 2Q RevPAR, I just kind of want to go back to the weakness that you saw in the quarter particularly relative to last quarter's comment that you'd be at 2% or greater. I mean, where else outside of the last week of May did you see weakness that drove that 70 plus basis point delta versus your prior expectation?

When we went into May we actually - the forecasts were much higher, the forecast for May RevPAR growth was closer to 3% and it dropped pretty substantially. For the first 15 days forecast dropped and then it dropped again, but it was mainly those last ten days of the month that where we really saw a drop off.

Got it and then as you look out the back half of the year any other challenging aside from July 4 holiday shift that you see maybe a similar impact for the remaining call it five months of the year.

July 4, is you definitely had an impact, so July was softer. Obviously the hurricane impact in third quarter last year we had 60 to 70 basis points, we estimated 60 to 70 basis points of last. The eclipse in those markets they were they four days in August, we experienced RevPAR increase of 38% higher than the previous year which is obviously higher than your average price rate. So we would estimate the eclipse impact for the quarter would be about 20 to 30 basis points. Phoenix will continue to impact us probably another 30 basis points or so in the third quarter before we start to get into season and then the hotel continues to ramp and then in the fourth quarter 150 basis points is what we estimated the hurricane impact of last year. Houston in the fourth quarter aligned with up 41% last year and Miami, Fort Lauderdale was 16%. Now with that being said, we have seen improvements and outside of hurricane in Houston and Miami and we do feel that will be able to make up some of that, but it's still going to be a negative impact year-over-year.

That's helpful, thank you and then just switching gears on the asset sales, frankly can you help us get our arms around the low perky pricing for the deals that you announced and kind of what are the main drivers as you think about valuation and offloading those hotels relative to the other assets in your portfolio in relative to the lower perky pricing.

So and I think you highlighted in your comments, we don't feel obviously that the perky pricing for the asset that we've sold is in any way indicative of the value of assets within our portfolio. It's worth noting that the assets that we sold were less than 100 keys and what we would consider to be more tertiary market. As we evaluate our portfolio, we look at potential for the markets and for assets within those markets. And as we opted to sell those assets and continue to explore the sale of one other that we have under contract at one point and continue to explore opportunities to sell with a couple of other interested buyers. We're looking at potential of the asset, long-term CapEx needs and operational efficiency as well as whether or not the asset is out there to our overall portfolio. Those sales are - sales of assets on I guess the outside of what are our total portfolio is like and I think that's reflected in the perky prices. I think what you should anticipate is that on a go forward basis there are fewer and fewer assets in our portfolio that are similar to these assets and as we look at transactions and contemplate transactions with other buyers, I think it's reasonable to expect that you would see different results in terms of perky pricing. But from a yield standpoint on those particular assets, we feel we're able to achieve market cap rates on the sale and we'll be able to redeploy proceeds from the sales more effectively to drive operating results in our product portfolio.

And then just any ballpark, is that five hotels or 25 hotels that are like you see that - you saw they were selling?

It's a handful of hotels that would fit this profile within our portfolio.

Got it and then you mentioned maybe a portfolio premium coming back for $100 million, $200 million small portfolios, do you continue to see that, do you continue to believe that and what's kind of the outlook for you to transact on more of a larger scale basis rather than one off and two off transactions going forward?

We continue to have conversations with groups about potential portfolios in that same size range. The groups that we're interacting with are newer to the space and so have less of a firmly established track record. And so I'd say we continue to be optimistic that the result of those conversations will be a transaction, but again because we're interacting with groups that we have not had kind of dealings with in the past there is - or we're reluctant to commit an advance to the transactions that we don't currently have under contract. That being said, the debt markets as I think Brian demonstrated in the refinancing of our corporate level debt continue to be incredibly strong for existing assets and that continues to drive interest on potential portfolio transactions and we continue to feel very good about the prospects for transactions in the $100 million to $200 million range for us and for others in the industry as we get into the back half of the year.

And what do you think it is the portfolio premium in terms of percentage higher on valuation versus a one off.

The transaction again, it's going to vary. If you look at the assets that we've sold from our portfolio on a one off basis and the interested parties for assets like that the premium - mostly because the buyer type and the availability of financing for that buyer could be as much as 100 to 150 basis points on - in terms of cap rate spread.

That's helpful, thank you.

Thank you.

Our next question comes from Jeff Donnelly with Wells Fargo. Please go ahead.

Good morning, folks. Maybe just a two part around Marriott, I mean on Hyatt, I think you might have touched on some of this, but your competitive advantage is always in pretty extensive and intensive benchmarking across the health in the Marriott brands you're associated with. Do you think that that knowledge is directly applicable to the Hyatt product that you're working with? And I guess maybe a second one is, you talk about sort of the poles, the Hyatt brand is one of the reasons why you're now looking at those assets, was there anything maybe pushing you there as well or was there anything that helps in Marriott's doing, maybe getting more aggressive in renovations or upgrades that might be causing you to look for a third brand?

I'd say on the first point. We will certainly benefit from our experience with Marriott select service hotels as we develop scale ownership within the Hyatt brand. Looking at the performance of assets we underwrite for acquisitions and/or interacting with the management companies that work with that if you need to identify areas of opportunity where we feel together with the Hyatt brand we can at value in the near term. In terms of things pushing us, I think the biggest push really is for us and the area of opportunity is the addition of a third loyalty program, which we feel continues to get stronger. As we look at the development pipelines for both Hilton and Marriott, those pipelines represent opportunities for future acquisitions for us and while we're participants to some extent as we have five hotels under development within those brand families now. We also see potential risk to the extent that the Hilton and Marriott are unable to grow their loyalty programs at the pace that they grow their development pipeline. And we felt as a result and in addition to the merits of the brands themselves, which I highlighted earlier in response to one of the earlier questions that I got. It was time for us to begin to add Hyatt properties to our portfolio and again recognizing that our first acquisition that's currently under contract, is scheduled for the end of 2020. We have a significant amount of time to build out a pipeline both of development and of existing assets, which will enable us to gain scale within those brands specifically. In the meantime, we do feel we'll benefit in a significant way by being able to use benchmarking from their peers within the Hilton and Marriott brand families.

That's great, thank you. And considering the cancellation fees, brands have been certainly rolling out new cancellation policies and I'm curious in the past few quarters, have you seen any change in consumer booking behavior or cancellation activity or even the fees that you collected from cancellations?

The fees that we've collected from cancellations have definitely gone up and also we have seen some - with Hilton moving to influx pricing and extending up the cancellation window. Early results are that we're shrinking the - or reducing the cancellations in mid-single digits, which is great and also moving - we're moving from several of the - I think it's approximately 40 - mid 40% range of the bar, the retail reservations actually to a longer booking window, so that has definitely helped and it allows our revenue management teams more opportunity to then resell those rooms. So we've been pleased with the results so far and expect that that would continue to improve.

Do you think that that's ultimately going to lead to better yield management? I mean, aside from just the realization of the cancellation fees, I mean, is it too early to say? I'm just curious, but how do you think that manifests itself.

Yeah, I do think it will continue to lead regular management.

And I might have missed this in your remarks, I apologize if I do, but I think last quarter you talked about some of the benefits of labor management technology did you mention that in your remarks and I guess where do you think you are in the process of realizing the benefits of that initiative?

Yes, we did realize –we continue to realize the benefits of these tools and we're probably about I guess you could say halfway through. I had to - the majority of our management companies are on a new labor tracking tool, but in terms of fully implementing and fully utilizing to the maximum capabilities, I would say are management companies are about halfway through that process. And so we expect to continue to see positive results from that for at least the next couple of quarters and then you - at some point we do get to the point where we've achieved in the majority of the low hanging fruit and then we just have to continue to work with their managers to identify other opportunity areas. But we are - also in addition to those technology - the productivity programs, we continue to work on refining and improving the benchmarking around labor management even to a minute level of detail and we're doing another project right now where we're looking at individual labor models by brand, by position to sort of highlight that where we think the gold standard is now for a particular brand and working with their outlying management companies on where we can adjust the models to get us to where we think we should be across the board, so we think there's some additional opportunity in that as well.

Great and just one last question, I think last quarter you said I think 63% of your properties had new construction within five miles. I know construction activity hasn't changed too dramatically, but I was just curious if there's been any change in that? I was just wondering if the labor costs that are certainly rising up there is making more difficult for people to start projects. Have you seen any shift in that?

And I highlighted in my earlier comments, we saw a slight decline within the quarter in terms of new development projects that were under construction within a five mile radius. And I guess it wasn't significant enough to call it a trend, but we've seen a slight uptick prior to that this past quarter we saw a slight decline.

Okay, yeah, sorry I missed out. Thanks.

No problem, thank you.

Next question comes from Brian Maher with B. Riley. Please go ahead.

Yeah, good morning guys. Most of my questions have been answered already, but can you kind of drill down on how you think about your pretty low leverage level, which I know gives you comfort and your shareholders comfort. But relative to where the share price is trading a little over a churn EBITDA discount to the peers and weighing that against buying opportunities whether they're existing assets or new assets.

Certainly, so and we've highlighted this in past calls, but we look at share buybacks as we look at the purchase of new assets for our portfolio and we're continually weighing the pros and cons of both. I think we've shown a willingness to buy shares of our company when we feel that the pricing is equally attractive or more attractive than buying assets and we'll continue to do that. It's certainly more attractive to us at today's level that it was a few months ago and we'll continue to watch it. I think what you've seen is that we've been conservative on both fronts. And where we do acquire assets, we're doing so because we feel the implied multiple for those assets and the embedded growth rate of those assets disappeared to what we could do outside.

And then when you think about acquisitions in your pipeline given what's going on with pricing, cap rates et cetera and the thought process between locking in a build opportunity for 2020versus buying now, as your pipeline been expanding, contracting, staying the same as we move through 2018, we continue to hear that the pipeline of assets available for sale has definitely increased.

So we're underwriting significantly more assets now than we underwrote same time last year. That being said only a small portion of the deals we underwrite, meet our investment criteria and of those deals that we underwrite were the winning bids on an even smaller portion. So we'll continue to be active on that front. I think being active on the acquisitions front gives us a good sense for what the market is and enables us to make intelligent decisions on the dispositions front as well and quite frankly it puts in a better position to assess the relative value of share repurchases at any point in time. But in terms of deals that we're seeing available on the market there are significantly more deals available on the market than they were same time last year.

Okay, thank you Justin.

Thank you, I appreciate it.

[Operator Instructions] Our next question comes from Anthony Powell with Barclays. Please go ahead.

Hi, just a follow up on a comment you made about the Hilton and Marriott pipelines relative to the loyalty rewards programs. Do you think they're growing faster in terms of development than then they are adding new customers in their loyalty programs?

I don't think necessarily they're doing that yet, but we feel that it exists as a potential threat in the future, so this is part of the conversation that we have on a regular basis. Marriott and Hilton, as we discuss are incremental asset in our markets. We are notified by both brands of everything, but Hilton and Marriott that we though within close proximity to the hotels that we own and because of the size of our portfolio and geographic diversification, that give us very good insight into what is being contemplated. It also gives us an opportunity to have robust conversations with them about specific assets and the impact those assets will have on our portfolio and on the market at large. I think there is receptivity on their side. I think both groups recognize that in order to maintain the value of their brands over time it's important to invest significantly in the loyalty program and to grow it at least in line with the development of their pipeline and to increase the value of those brands that needs to grow faster and I think there's a concerted effort on both sides to make that happen. But as they continue to grow that's something that we watch very carefully.

And we do as Justin said, we watch very carefully and as of right now the loyalty occupancy percentage for those brand is growing. So that's something that we definitely pay attention to and if we start to see that erode then we will be surely following up with the brands to have conversation about it, but as of now it's still growing.

Got it and have you seen an increase in I guess former Starwood customers engaging with Marriott select service property or could you even see that if that happened?

To this point we haven't seen a large increase and overall if you look at the - what's Marriott willing to report, there is - there hasn't been a lot of transfer of viewpoints and things like that back and forth. But we are very anxious because this month actually had - assuming that everything goes right, on 18 we will have the loyalty platform and the reservation platform merged and so we're looking forward to being able to take advantage and there's markets where there wasn't distribution in the Starwood select service product to being able to pull through more of the Starwood guest.

Alright, thank you.

Thank you, I would appreciate it.

I would like to turn the floor over to Justin for closing comments.

Like to express our appreciation to all of you for joining us this morning and hope that as you travel you'll take opportunity to stay with us in one of our hotels. Have a great day.

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