Good afternoon, and welcome to the Host Hotels & Resorts Second Quarter 2023 Earnings Conference Call. Today's conference is being recorded. And at this time, I would like to turn the call over to Jaime Marcus, Senior Vice President of Investor Relations. You may go ahead.

Thank you, and good afternoon, everyone. Before we begin, please note that many of the comments made today are considered to be forward-looking statements under federal securities laws. As described in our filings with the SEC, these statements are subject to numerous risks and uncertainties that could cause future results to differ from those expressed, and we are not obligated to publicly update or revise these forward-looking statements. In addition, on today's call, we will discuss certain non-GAAP financial information, such as FFO, adjusted EBITDAre and comparable hotel level results. You can find this information, together with reconciliations to the most directly comparable GAAP information, in yesterday's earnings press release and our 8-K filed with the SEC and in the supplemental financial information on our website at hosthotels.com. With me on today's call are Jim Risoleo, President and Chief Executive Officer; and Sourav Ghosh, Executive Vice President and Chief Financial Officer. With that, I would like to turn the call over to Jim.

Thank you, Jamie, and thanks to everyone for joining us this afternoon. During the second quarter, we delivered a comparable hotel RevPAR improvement of 2.7% compared to the second quarter of 2022. Our RevPAR performance for the quarter came in below our quarterly guidance primarily as a result of moderating transient demand in San Francisco and Seattle and at our resorts to a lesser extent. Comparable hotel RevPAR growth was 3.8% during the quarter, underscoring the continued strength of out-of-room spend. During the quarter, we delivered adjusted EBITDAre of $446 million and adjusted FFO per share of $0.53. For our second quarter comparable hotel EBITDA of $449 million was 9% below 2022, it was 9% above 2019. Second quarter comparable hotel EBITDA margin of 32.7% exceeded 2019. This marks the fifth consecutive quarter since the onset of the pandemic that we have achieved RevPAR, RevPAR and comparable hotel EBITDA and margins ahead of 2019 levels. Comparable hotel RevPAR for July is expected to be approximately $209, which is 2.5% above July of 2022. Our performance in the first half of the year, coupled with the macroeconomic backdrop in the second half, led us to tighten our full year RevPAR growth guidance range to 7% to 9%. Bringing the midpoint of our full year expected RevPAR growth to 8%. At the midpoint of our guidance for full year 2023, comparable hotel EBITDA is forecasted to be approximately 9% above 2019. As we look at the current macroeconomic picture, it is important to consider how our outlook has shifted over the past six months. As the second quarter progressed, we started to see a moderation in volume at our hotels in San Francisco and Seattle, which were already affected by softer demand. At the same time, many high-end leisure travelers took the…

Thank you, Jim, and good afternoon, everyone. Building on Jim's comments, I will go into detail on our second quarter operations, our updated 2023 guidance and our balance sheet and dividends. Starting with business mix. Overall transient revenue was up 80 basis points to the second quarter of 2022, driven by rate growth, which offset a slight decrease in demand. Softening transient demand drove the miss to RevPAR guidance driven primarily by underperformance in San Francisco and Seattle and at our resorts to a lesser extent. Results in the second quarter saw transient revenue down 8% over the all-time high of the second quarter of 2022. While transient rate at resorts was down year-over-year, it was still 61% above 2019 after being up 54% compared to 2019. In fact, transient revenue at our resorts increased in the second quarter compared to the first quarter despite the slight decrease in demand. Business transient revenue was 16% above the second quarter of 2022, driven by a 10% rate increase. Demand also increased by nearly 6% above last year, driven by our hotels in New York, Boston and Washington, D.C. Our downtown properties accounted for 65% of the business transient demand, which is in line with pre-pandemic trends. Small and medium-sized businesses continue to drive the recovery, representing the majority of our business transient demand today. Turning to group. Group room revenues were 4% above the second quarter of 2022, fully driven by rate growth. The 1.1 million group room nights sold in the quarter was slightly ahead of both last year and the first quarter, which aligns with 2019 seasonal trends. Washington, D.C., Chicago and Boston drove the group room revenue growth compared to 2022. With respect to group mix, corporate group room revenue was up 9% in the second quarter, driven…

[Operator Instructions] Our first question is coming from Duane Pfennigwerth with Evercore ISI. Your line is live.

Thank you. I appreciate the macro stats that you shared. But do you have any way to track international inbound as a percent of your own portfolio? Where does that stand now versus pre-pandemic levels as a percentage of the mix?

Yes, it's Jim. Pre-pandemic, international inbound accounted for roughly 10% of our room night. In quarter 2 of 2022, it was 7.8%. And that is compared to 7.4% in 2022 in the second quarter. So we feel that international inbound is a tailwind to our portfolio performance going forward. In particular, if you saw in the month of June, international inbound was only 80% of where it was in June of 2019. Outbound, as we've talked about, was 110% where it was in June of 2019. So as the world starts to normalize and hopefully, as we can right sort out the Visa wait times in the U.S., which are 400 days now on average, and it's a real drag on international inbound. As an example, Canada, you can get a visa from a country that they require Visa for travel to Canada in 55 days. So -- that is -- that's a big issue that we, as an industry, are dealing with through U.S. travel and through AHLA as well. The other impediment at this point in time with respect to international inbound in our West Coast markets, in particular, is travel from China. Pre-pandemic, we had 350 direct flights a week between the U.S. and China. As it sits today, we have '24. So we're optimistic that over time, things are going to normalize and that we're going to see the return of the international travel, which will further bolster our performance.

And then just for my follow-up on BI on the business interruption. As you think about growth into 2024, you'll have a natural recovery in Naples from the Ritz being back online. My guess is that would begin to contribute year-on-year in the fourth quarter. But from a growth perspective, what would be the ideal timing for BI reimbursement to hit?

Well, I'll let Sourav jump in on this, but let me just kind of set the table with respect to how our insurance program works. We collected $113 million all related to restoration and physical damage repair. We have a $130 million receivable outstanding, and we won't start recognizing business interruption proceeds until we collect the $130 million at a minimum.

Yes, Duane, on the timing, honestly, that's why we don't have it in our forecast. It's very difficult to say. We are working with the insurance carriers right now in terms of determining how much that BI amount is. So the collection of it could be certainly some amount in Q3 led into Q4 as well as into the following year. We actually got from Hurricane Ida, if you recall, which impacted New Orleans last year, we just got a $2.7 million BI payment this quarter. So the timing is very difficult to gauge. We fully expect, as we said, that we would be paid out. And it's certainly going to be a meaningful amount. The exact timing is very difficult to predict at this point in time.

Our next question is coming from Aryeh Klein with BMO Capital Markets. Your line is live.

Thanks. Good afternoon. Within the second quarter, was it June where you saw things not really play out as you expected? And then the magnitude of the implied impact to second half RevPAR in guidance is, I guess, less of the impact in Q2. Can you add some color on the underlying assumptions? And is there something in there that may be better than you originally expected?

All right. Can you clarify that? Is this -- are you referring to the -- our assumptions with respect to the second half of the year?

Yes. The first part was just on when you started to see the weakness in the second quarter? And the second part is, I think the RevPAR impact was 60 basis points, worse than expected in the second quarter and then another 40 basis points in the second half of the year. So just curious if you can give some more color on the second half and some of the underlying assumptions there -- how you expect that to play out if there's anything better or worse than you originally expected?

Sure. So as we saw performance weekend in the month of June. That's really when it -- we saw the vast majority of the weakness occur. We went back at the property level and really look at the assumptions that were in the forecast with respect to transient pickup in the quarter for the quarter. You may recall that we had transient pick up as high as 28% in the quarter for the quarter and another quarter with 20%. While that didn't materialize for the second quarter. So as we have talked about trends normalizing, we think that is a trend that is normalizing at this point in time. And we were very, I would say, thoughtful and deliberate about how we expected the second half of the year to play out. And we really washed out a meaningful amount of the transient pickup in the quarter for the quarter, and that led to our revised forecast. Is that helpful?

Yes, I appreciate the color. And then just a quick other question. I think you have some seller financing coming up later this year. Any update there on how you expect that to play out?

Yes. Sure. Well, we had the loan on the Sheraton Boston matured. The maturity date was August 1, a few days ago. And the borrower was in the process of refinancing us out, and they need a little more time to do it. So we entered into an agreement with that borrower to provide for a 60-day extension. And it also involved the receipt of a 10% principal pay down on our loan, which was $16.1 million, and we have received that money. And we restated the interest rate from 6.5% to 12%. So that loan is now due at the end of September, but we materially improved our position on it, and I am very confident that the borrower is going to be able to get the financing done. The nuance was a condo regime that they were pursuing on the property to effectuate their business plan. They were going to convert 1 tower. They are going to convert 1 tower to student housing and leave the other tower as a hotel, and it was just taking a bit longer to effectuate the condo documents and the like to get it done. With respect to the loan on the Marquis, we have been in contact with the borrower and they are actively in the market pursuing a refinance. So we feel good that they're going to be able to get that deal done.

Great. Thanks for all the color.

Thank you. Our next question is coming from Anthony Powell with Barclays. Your line is live.

Hi, good afternoon. Just one for me. And I guess on the other side of the refinancing activity, you saw that an owner of a resort in May was able to get a hotel refinance with a cash out refi at a high rate, but good proceeds. So do you think that kind of ability limit kind of the number of deals that come to market in terms of your ability to maybe do some larger acquisitions here?

Yeah, I think it really is very sponsor specific, market-specific and hotel-specific, Anthony. And the asset that you're referring to in Maui had been on the market for sale on more than 1 occasion, frankly. It's something that we obviously looked at that given our exposure on Maui and the assets that we own, it wasn't something that we could get excited about. And whenever they could not effectuate a sale at the price that they wanted, they were able to get the deal done. Now that's a unique asset because it had -- as you know, the resort market is extremely strong, and it had really strong underlying cash flow, strong performance. It had undergone a renovation and had the right equity capital behind it as well. So there will be circumstances like the Maui property where sellers will be able to get an attractive refinance, but there are also going to be circumstances where all those boxes are in check whether or not the asset is not performing well, whether or not it's been reinvested in, whether or not it's in a market that a lender would find attractive to deploy capital to, so deploy money too. So I still believe that over time, given the fact that there have been so many assets that have not been reinvested in over the course of the pandemic and owners/borrowers are strapped for cash and they have to put capital into their hotels that we may see opportunities as later in this year and into 2024.

Thank you.

Thank you. Our next question is coming from Smedes Rose with Citi. Your line is live.

Hi, thanks. I just wanted to ask you a little more about the weaker-than-expected transient business in San Francisco and Seattle. And I think in San Francisco, maybe it's not all that surprising given kind of continued delays in their recovery and a lot of sort of ugly headline issues around quality of life. But in Seattle, do you do you ascribe the weakness to just kind of more of sort of local economic issues, maybe to do with the tech industry? Or are you also starting to see a pullback in because of sort of issues that, that city might be having as well? And is that going to become a drag longer term on the portfolio?

Hey, Smedes, it's -- with Seattle, we actually saw BT improve. So that was certainly not an issue with Seattle. It was just overall sort of anticipation of how much we could pick up not only in the quarter for the quarter, but really in the month for the month, there was sort of -- we started seeing the trend shift a little bit at the end of May into June. So for us, Seattle actually continues to be a relatively -- it was always a weaker market to begin with, at the beginning of this year, but there is signs, especially when you look into 2024, Citywide and just pace, there certainly is strength in the Seattle market moving forward. So this we attribute really to sort of short-term transient pickup. Overall, I mean, when you look at sort of Seattle, specifically BT revenue grew actually year-over-year by about 5%, and that was all rate driven by Amazon. Group room nights and total revenue production also exceeded our internal forecast. So it really was BT driven. It wasn't anything to do with group at all. So overall, we sort of -- sorry, leisure driven versus BT driven.

Okay. And then can I just follow up on that. When you -- as you reintroduce the Ritz-Carlton and you talked about the $71 million, I guess, that you lost through disruption. When -- what sort of time frame would you expect to recoup that? Is that something that will happen all in 2023? Or how are you thinking about that?

Well, I think this goes to the earlier question regarding the receipt of timing of business interruption proceeds. And we haven't put the BI in our forecast because we just don't know when we're going to receive it. But I'm hopeful that certainly through the course of 2024, we should be able to close out most, if not all, of the claim associated with Hurricane Ian, and we do anticipate very strong performance from both the Ritz and the Hyatt Regency next year as well.

Okay. But do you think -- I mean I was asking about the business interruption and more about recouping the EBITDA that was lost and getting back to getting that $71 million back just from operations. Do you think that's a 2024?

That is -- barring a macroeconomic meltdown, that will certainly happen throughout the course of 2024. I mean it's a seasonal property. We're very pleased with the pace that we're seeing around festive, which is really December, January, February -- December, January and then that the property really takes off in that period of time in the first quarter. So there is incredible enthusiasm for the new offerings at the hotel, at the resort in Naples. It's a really unique property, and we're very optimistic that it's going to perform very well. And we should between those two assets over the course of 2024, rebuild our $71 million that we lost this year due to.

Smedes, just want to clarify here for you understand, we are actually picking up combined for a non-comparable hotels, which includes Coconut Point and Ritz Naples $17 million in the adjusted EBITDA number. So it's not in our hotel EBITDAre, but it is in our adjusted EBITDAre. That's for 2023. So the 2024, $71 million, which we're saying, that's incremental to that $17 million. None of that $71 million is really in the '23 number, if that makes sense.

Okay. Thank you.

Thank you. Our next question is coming from David Katz with Jefferies. Your line is live.

Hi, good afternoon, everyone. Thanks for taking my question. I wanted to go back to the expense side because it's come up a handful of times around the cost of labor. One, as a function of just being fully staffed on a comparable basis versus last year, but two, the actual per person cost of it and whether that's going up. And secondarily, we've talked before about the cost of insurance, and I just wanted to get an update there as well, please.

Sure. I think we had messaged before that our wage rate growth for this year, we expect it to be around 5%. And that we are still holding to that. And thus far, when you look through our expenses, we have actually performed pretty well on our expenses, and you can see that in our margin expansion relative to 2019. For the second quarter as well as what we are expecting for the full year to the midpoint being 40 basis points. So labor-wise, we still expect a 5% rate growth. We are seeing all the productivity improvement improvements we made as a result of redefining our operating model, still holding and certainly something that is sustainable, which is driving the margin expansion to 2019. As far as insurance goes, we had baked into the forecast approximately 50% premium increase. Our renewal was in June 1. We maintained our coverage and the limits that we had previously. So no change to that. The overall rate increase was about 38%, and the premium increase, like I said, was close to 50%. So for the full year, which is already in our forecast and was in our forecast, insurance expense is expected to go up about 40% year-over-year, which equates to approximately $61 million for 2023.

Thank you very much.

Thank you. Our next question is coming from Michael Bellisario with Baird. Your line is live.

Thanks. Good afternoon everyone. Just one question for me on the group booking front. Can you provide some color just on what markets you're seeing pick up momentum? And there are also any markets in the portfolio that were either softer or you see softening or maybe just leveling off as you look out to the back half of the year in '24? Thank you.

Sure. For specifically for 2024, as Jim mentioned, our total group revenue pace is ahead to 2019 by 1.5%. And just to remind you, when we were looking sort of -- in the end of last year, we were actually down double digits in total revenue pace and that improved to down about 4.4% to '19 in the first quarter, and now it's actually positive. So we're seeing really positive activity and momentum when it comes to 2024 pace. For our specific portfolio, where we are seeing PACE very strong is Atlanta, Chicago, New Orleans, New York, Phoenix, San Diego, as mentioned earlier, Seattle and Washington, D.C. And that wraps with sort of the citywide pace improvement as well, where we're seeing positive city-wise, better than '19 and for New Orleans, San Diego, Seattle and D.C.

Thank you. Our next question is coming from Bill Crow with Raymond James. Your line is live.

Thanks, good afternoon. Jim, help me understand this leisure normalization that we're all talking about. Because implicit in your remarks, at least I took it that maybe rate is staying strong, but demand is off. We heard from a peer this morning that said, rate is down 10% in one of their markets, but demand is strong. I guess I'm trying to figure out what you're seeing out there. Is it on the demand side? Is it on the rate side? Is it both on leisure normalization?

Sure, Bill. We had always anticipated in our forecasting that rate was going to back off a bit. I mean we never believe that rate was going to be sustainable relative to where it was in 2019. And certainly, in -- second quarter 2022 was an anomaly on many, many fronts, given Omicron in Q1. So we assume rate was going to come down, and it did. I think our leisure rate came down about 7% all in all. That said, it was still 61% higher than where it was in Q2 2019. What we didn't anticipate, and I don't think anybody anticipated if you look at the commentary of travel-related companies in general, whether they're the car rental companies or the airlines was the desire by the U.S. consumer to travel abroad. And that is where we saw the softness in our leisure business because we didn't pick up the volume that we anticipated that we would. I think our total leisure occupancy was down by one percentage point. So it was nothing meaningful by any stretch of the imagination. Rates are still at record levels. As you saw in the release, TRevPAR was up 3.8%. So we're still seeing very healthy out-of-room spend, whether it's at outlets or golf spa and otherwise. I mean we had a record outlet spend per occupied room, I think, of $193 or $196 in the quarter. So I don't know if people are going to go to Europe every quarter or if they're going to go to Europe in the second quarter of next year. But clearly, this was a phenomena that I think everyone missed -- and we're just very -- we're very comfortable with how the resorts have performed in general. Certainly, from a rate perspective, the issue was really a slowdown in volume.

If I could just pursue that just a little bit more because you talked about this normalization and kind of we call it the travel -- the international travel imbalance. But it's been kind of three years of pent-up demand. So it seems like that could continue for a while longer. And I'm just curious, and you probably don't have an answer, but yours is better than mine. Are we going to be talking about continued normalization next year?

I hope we can get -- frankly, Bill, I hope we can get beyond talking about 2019 and in 2022 and say, okay, 2023 is the year we look at, and it's a new benchmark in our new base year going forward. So normalization to occur in 2024, I frankly think that, that's a tailwind to us. And it really is a tailwind because we're international inbound performed in the second quarter. And some of the issues we talked about with respect to flights from China and visa wait times and things of that nature. I mean, we just didn't see any pickup in in our resort properties or elsewhere, frankly, from the international inbound travel. I mean we had 10% of our room nights in 2019. We were 7.8%. So again, I think it's a positive for us going forward. And I think it's positive for the industry going forward. We're certainly not seeing anyone remain in the consumer is very healthy. We're not seeing them rein in their spending.

Great, thanks. Jim, appreciated.

Sure, Bill.

Thank you. Our next question is coming from Tyler Batory with Oppenheimer. Your line is live.

Good afternoon. Thank you. I just want to stick on the leisure topic for a minute here. And just a multipart question. I mean a lot of the commentary relates to your resort properties. I'm also interested in what you're seeing urban leader, specifically on the weekends, that's following a similar trajectory in terms of a softness that you're experiencing on the resort side. And then just kind of a follow-up, thinking about revenue management. If demand slows further from here at your resort properties? Would you look to hold on to occupancy and lower rates or maybe you want to hold on to rate and you're okay sacrificing some occupancy? Just trying to think through some of the scenarios there.

Yeah. I will answer the second part of your question first, and I'll let Sourav talk to the first part regarding urban leisure. That's a tricky question to answer about really looking at the proper yield management strategies. You flow a much greater percentage of ADR to the bottom line than you do a plan occupancy. And I think one of the things that has been really encouraging over the course of the last several years is the fact that, generally, across the board, properties have held rates and rate integrity has remained intact. And there would have to be a real meaningful trade-off, i.e., significant pickup in occupancy before we would consider cutting rate. Because once you cut rate, it's difficult to go back to the other direction. And as I said, we saw a 1% reduction in occupancy in Q2 and rate was still 60% above where it was in the second quarter of 2019. And it really just flows to the bottom line and has a meaningful impact on margin performance.

Yeah. And on the leisure front, when you're looking at the urban hotels, they actually were pretty consistent overall. We didn't see the same level of drop off if you will, in terms of the demand. And we saw a little more consistent short term in the quarter for the quarter pickup with the exception, obviously, of San Francisco and Seattle, as we mentioned. But overall, when you look at sort of our overall other market performance, we were actually up in rate 6.3% and for a convention portfolio, about 5.1% overall for that. And while resort was actually down about 12%. So definitely had a more stable performance even when we looked at the holiday performance during the quarter.

Okay. I appreciate that detail. Thank you.

Thank you. Our next question is coming from Chris Woronka with Deutsche Bank. Your line is live.

Hey, good afternoon, guys. Thanks for all the detail so far. Question is on the tail that you expect to get from the capital transformation program. I think you mentioned eight of the hotels are fully stabilized and you're getting the 9 points. Just how long does that last? What about the other, I guess, eight or nine hotels? And then does that make you want to -- I think you mentioned there were two others that you renovated that weren't in the original program. That make you, Jim, want to look at even more hotels and as other owners are dealing with issues and maybe not fully keeping up on their own capital?

The short answer to the second part of your question, Chris, is we will continue to be opportunistic and where we see an opportunity to do a transformational renovation and I want to underline the word transformational because I think that is why we are seeing the outperformance that we are achieving in the recently renovated and stabilized properties. We have the balance sheet. We have the capital. We have the team internally to execute on those types of opportunities, and we will certainly look to deploy capital where we think we can achieve better than 3 to 5 points in yield index. To answer your question with respect to how long does it last? Well, I suppose I could tell you that it would last until the property looks hard, and we have to renovate it again. And that's probably you're talking a seven-year cycle generally for a rooms renovation seven to eight years, roughly. So we are really optimistic that we were able to deploy the type of capital that we did into our properties over the course of the pandemic, and we expect to see future strong outperformance going forward.

Okay, very helpful. Thanks, Jim.

Thank you. Our next question is coming from Robin Farley with UBS. Your line is live.

Great. Thanks. I just wanted to understand a little bit better your guidance for second half margin. You have declines kind of moderating from Q2, but RevPAR not necessarily much stronger. So just kind of wondering how you are comfortable because a lot of the factors you mentioned, I would think could still have tough comps in terms of labor costs and cancellations -- fewer cancellation fees. So just any color there you can give us?

Yeah, Robin. I mean, when you look at sort of our guidance and I'll speak to dollars perspective, we basically took it down, what, about $25 million, as you mentioned in our prepared remarks. And we would attribute about $17 million really to the second quarter and about $8 million -- sorry, $18 million for the second quarter and then $7 million, call it, for the second half. And the way you look at sort of the RevPAR growth that we're assuming, we effectively looked at the short-term pickup market by market and we expected in the quarter for the quarter pickup and really scrubbed that to get to the RevPAR growth of low single-digit growth for the second half. On the expense side, the expense drivers that we effectively flowed through was all revenue driven. So when you look at the second quarter as well, the relative drop in terms of margin to what we had guided to was more than 80% all revenue driven. So we feel very comfortable with all the expense growth that we have in there. The only thing we did moderate is also food and beverage revenue, which obviously just given Q2 ends, we moderated that. That flows through the food and beverage department line as well as impact margins. So we feel very comfortable in terms of our expense forecast for the second half. relative to the revenue growth that we have.

Okay. Great. Thank you. And I don't know if I heard you guys mention an expectation for corporate negotiated rate for next year?

No, we did not. That will not start until really later in August. So we'll have more color as to what that will be shaping up like probably on our third quarter call as we typically do.

Okay, great. Thank you.

Thank you so much. Our final question will be coming from Dori Kesten of Wells Fargo. Your line is live.

You mentioned a few times washing out the short-term transient pickup in the second half of the year. What would your guidance look like if the pickup was comparable to 2019?

What it would look like if it was in terms of the transient pickup being comparable to 2019 because we're obviously off from a BT perspective, meaningfully we are off by 20%. The group for night on also off. So It's kind of difficult to say relative to '19 in terms of room night because are up in rate, right? So I don't have exactly what that number would be, if our rate was held exactly at '19, and we had the same amount of resin.

Okay. I guess I'll ask a second one. So you've talked about the healthy out of room spend. And I think year-to-date, the RevPAR to to RevPAR growth spreads about 200 basis points. And so I'm just trying grout -- like what do you see in the second half of the year that leads you to believe by year-end, room and out of them spend growth should converge?

So when you look at where the food and beverage came in for the second quarter relative to '19. It was certainly lower, and that was really being driven by sort of the type of groups that we actually got in second quarter and a lot of the rebookings that took place during the pandemic that were in Q2. When you look forward into Q3 and Q4, -- our -- as we mentioned earlier, third quarter is our weakest group quarter. So food and beverage and Banco will be lower as well in Q3, but Q4 is a strong group quarter for us. And that's where we feel like food and beverage should perform well in the fourth quarter just based on the catering pace that we have. And as a reminder, I've been banking catering contribution with the metric you look at, which is up 20% in Q1 that was up over 6% in Q2 as well. So that we still have we still building on the strength of banquet and AV going forward in the second half as well as the outlook performance of our resorts, which, by the way, on a per occupied room basis was 46% above 2019.

Okay, thanks.

Thank you. We have reached the end of our question-and-answer session. So I will now turn the call back over to Mr. Jim Risoleo for any closing comments you may have.

I'd like to thank everybody for joining us on our second quarter call today. We appreciate the opportunity to discuss our quarterly results with you -- we hope you enjoy the rest of your summer, and we look forward to seeing many of you in person this fall. Thanks again. .

Thank you. This concludes today's call, and you may disconnect your lines at this time. We thank you for your participation.