Greetings and welcome to Park Hotels & Resorts Inc. Third Quarter 2021 Earnings Conference 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 this conference over to your host, Mr. Ian Weissman, Senior Vice President, Corporate Strategy. Thank you sir. You may begin your presentation.

Thank you, operator, and welcome, everyone, to the Park Hotels & Resorts third quarter 2021 Earnings Call. Before we begin, I would like to remind everyone that many of the comments made today are considered 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 may discuss certain non-GAAP financial information, such as adjusted EBITDA and adjusted FFO. You can find this information together with reconciliations to the most directly comparable GAAP financial measure in the yesterday's earnings release as well as in our 8-K filed with the SEC and the supplemental information available on our website at pkhotelsandresorts.com. This morning, Tom Baltimore, our Chairman and Chief Executive Officer, will provide an overview of the industry as well as a review of Park's third quarter performance and thoughts on demand trends.. Sean Dell'Orto, our Chief Financial Officer, will provide additional color on third quarter results as well as more detail on our balance sheet and liquidity. Following our prepared remarks, we will open the call for questions. With that, I would like to turn the call over to Tom.

Thank you, Ian, and welcome, everyone. I'm pleased to report another quarter of strong improvement to operating fundamentals, and we are pleased to report that we've achieved corporate level breakeven for the first quarter since start of the pandemic. Based on the strength, we witness that our resort properties, the leisure traveler add significant pent-up demand as evidence by incredibly strong rates and out-of-room spend. Additionally, we are seeing promising signs of sequential growth, business transient and group demand in pockets across our portfolio. And while still early, we believe this is a positive indicator that we are on the path toward recovery. On a macro front, there continues to be encouraging indicators of growth and momentum including a nearly 8% annual increase in non-residential fixed investment projected for 2021 and an ongoing momentum on vaccine distribution, which should contribute to increased mobility and confidence. Additionally, the unemployment rate improved to 4.8% in September, more than 100 basis point improvement from the start of the third quarter. While U.S. personal savings stand at an impressive $1.3 trillion as of September highlighting the ongoing strength of the U.S. consumer, which we expect to continue fueling the strong recovery in overall demand. Against this backdrop, I'd like to remind listeners of Park's unique and compelling value proposition, and how the execution of our strategic priorities is positioning us well for the recovery. First, we have seamlessly executed on non-core disposition program which is greatly enhanced the overall quality of our portfolio and position the company for attractive long-term earnings growth. In total, we have sold or disposed of 31 hotels accounting for over $1.7 billion of total proceeds to spinning out of Hilton five years ago including all 14 of our international assets. Second, our portfolio combines the right mix of demand…

[Operator Instructions] Our first question comes the line of Rich Hightower with Evercore. You may proceed with your question.

Hi. Good morning everybody.

Good morning, Rich.

Good morning, Tom. I'm asking, I guess a question related to - I guess the context is the reopening in the Bay Area and the return to office targets in January of next year. But I'm wondering as you look at, I guess what we might consider alternate data around office utilization in the different major markets. If you've noticed any historical patterns there in conjunction with the return to office metrics in other cities around the country and maybe how that translates into the pace and the cadence of the occupancy build up and just kind of the ramp up related to some of those indicators. And then also, where do you think about timing for the reopening of Parc 55 again in San Francisco?

Yes. There's a lot in your questions there, Rich. Let me let me talk a bit about kind of Parc 55 for a second. As we sort of look out to San Francisco, I mean, obviously I think probably the most complex situation in our portfolio. Obviously, as we had six assets there in the CBD. We have sold two at 2019 pricing, very pleased, very proud about that. Obviously, we've got the Hilton Union Square and the Parc 55 across the street. Union Square is open. Our plan is based on demand trends right now is to open Parc 55 probably in December time frame. Really pleased that JPMorgan is proceeding with the healthcare conference. One, we understand they're committed to it, which we think is great. Obviously, what we're hearing so far is probably 50% to 75% participation at 2019 sort of rate levels. I think also an encouraging sign there. So, if that holds true and we believe it to be the case, it certainly makes sense for us to probably reopen Parc 55 in that December time frame plus or minus. Again, we will continue to evaluate. As you've seen, I think us do carefully in all of the situations. We reopen New York and obviously New York is exceeding expectations and doing quite well. Regarding office occupancies, clearly there's more sublet activity in San Francisco than I think in other major markets. But I think it would be a huge mistake to sort of bet against San Francisco. We hear this all the time. I think it's important to remind listeners when you look at the amount of innovation that is coming out of that market the job creation, the educational footprint, the venture capital industry being anchored there in the amount of capital flows.…

No. That's helpful. Yes. I'm good. Thank you, Tom.

Our next question comes from the line of David Katz with Jefferies. You may proceed with your question.

Hi, good morning.

Good morning, David.

Good morning. Thanks for taking my question, and for all the commentary. I did hear commentary about the prospect of being positioned to be a buyer. And I wondered whether there are circumstances or any discussion worth having on whether you'd be a seller, and how you think about some further divestitures at the moment?

Yes. Dave, it's a great question. All options are on the table to create value for our shareholders. I think we've been crystal clear and I think I've made a statement before and I'll make it again. We're going to get paid either by the public markets or the private markets. And when you look at the kind of significant discount to NAVs that exist today, it's certainly not sustainable. And clearly with us trading, it's somewhere at a 30% discount plus or minus. As I make the case if you will for just a minute for Park, think back to the crisis and the decisions that we made. We were calm. We were prudent. We didn't panic. As Sean outlined, we did three bond deals. We pushed out our maturities. We've now paid off 97% of our bank debt. We didn't do any kind of dilutive equity raises. We didn't sell any assets at wide discounts. All of those were very wise and appropriate decisions. We've really reshaped the portfolio. We've sold now 31, just sold and/or disposed of 31 assets for the $1.7 billion. We bolted on Chesapeake 18 assets there for the 2.5 billion. We've achieved all of our 2021 priorities reopening hotels with the exception of Parc 55 and the Hilton and Short Hills which will open probably in our first quarter of next year. We've reimagined the operating model taking out $85 million in cost about 300 basis points. We've sold five assets this year at just south of $500 million and obviously paid down debt. And we've transitioned to offense, meaning looking at both the embedded opportunities within our portfolio and in addition to that obviously we're open to acquisitions that makes sense. And we have a lot of optionality. Our built-in gain tax is part of the spin expires at the end of 2021, that's going to be huge. We've got NOLs that are also significant, that also give us optionality. So to your point of selling and your question, I think the most likely scenario would be that we look to partner in JV on an iconic asset or two. Hawaii would not be included on that list. But others that we could sell in interest at private market valuations and which would then allow us and shield that with our NOLs that gives us optionality to go on offense whether that's embedded opportunities within the portfolio or whether that's opportunities externally. We will be thoughtful. I don't know that we have a need to buy an asset today or tomorrow, particularly given the fact that we've been so active in the recycling the last few years. As I mentioned selling assets and of course obviously bolting on the Chesapeake portfolio.

Perfect. Thank you so much.

Our next question comes from the line of Anthony Powell with Barclays. You may proceed with your question.

Hi, hello. Good morning.

Good morning, Anthony.

Good morning, Tom. Its a question on acquisitions. You mentioned you want to be selective and you're looking to grow eventually. A lot of your peers are focused very heavily on these very ultra luxury smaller properties. You've talked this morning about how you're very, I guess, positive on the long-term return of business travel and group. Could you maybe go the other way and lean more into upper-up scale group hotels and urban markets or would you to be looking at some of these kind of more small luxury properties that others have been buying?

Yes. It's a great question Anthony. And look, we will continue to follow the demand patterns. We have put a stake in the ground. I think we've been clear. And look, we are we are well-positioned. We've got 18 hotels that clearly have a strong leisure. And if you look at what's happening for us in Orlando and Hawaii and certainly Key West that we shared. I mean, we're seeing really aggressive, certainly performance there and we will continue to look. There are markets that where we're underrepresented phoenix comes to mind, parts of Texas clearly would like to continue to expand our footprint into Florida, at the same time that's an overbought trade right now. I think some of the pricing is quite aggressive. I do have -- intellectually have a hard time with whether you can generate the scale and the return and the cash flow on some of the baby resorts. But we'll see how that unfolds over time. This does remind me in a ten plus years ago. I've been around for a long time when the focus was on lifestyle hotels in New York and I've cited this example, but I think it's a real example. And that was the -- there was this excessive focus on buying those lifestyle hotels in New York and as we now fast forward and look back, I don't think that trade really worked out for a lot of people, particularly at the prices that people were paying. So we will continue to evaluate the portfolio. We are confident that upper upscale and luxury hotels in top 25 markets and premium resort destinations. We have a great footprint on resorts now. We'll look to expand that selectively. But I think it's got to make economic sense. I think the message we'd like to send is, we have so many embedded opportunities within our portfolio. I think Bonnet Creek is just a great illustration of that. And our basis there given where we're trading is about 300,000 a key. We've got 350 acres of 1500-room resort, a world-class golf course. We're expanding the footprint there for the meeting footprint in addition to the optionality that we have from a leisure standpoint. We think that's a wise and prudent investment. And that's going to yield superior risk adjusted returns for our investors.

Got it. Thanks. And maybe switching gears to pricing, that the leisure pricing has been very strong across the country. We're seeing prices well above 2019 levels. But in group and BT [ph], I think prices are at 2019 or slightly below. Is there an opportunity for you and others to push pricing on corporate group and business transient a bit more or are you more focused on getting those parts of the business back in volume?

Yes. It's a great question, Anthony. I do think over the intermediate and long term there's going to be more pricing power in this business. And I have to believe that demand is going to outpace supply certainly given the amount of scarring and pain that occurred through this pandemic. And we're pleased as some of the stats that Sean outlined I think really demonstrate that operators are being disciplined on pricing and we're getting close to 2019 levels and we're still at RevPARs at our 20%, 30% below and in some cases below 2019. So I do think that there's going to be a much better opportunity for real pricing power and margin growth in this industry which we have not seen. We certainly did not see the end of the last cycle. So we are encouraged as we look out.

All right. Thank you.

Our next question comes from the line of Smedes Rose with Citi. You may proceed with your question.

Hi. Good morning. This is Saffron [ph] for Smedes. Can you just talk about what you're seeing on labor costs. I think in March you cited $70 million in cost savings from a reduction in hotel staffing? And then, as you think about that what percent do you think could be offset of the rising labor costs by the reduction in staffing needs?

Yes. It's a great question. Let me answer the first part. What we've said is, we spent a lot of time and huge credit to Sean and our asset management team and the other men and women on the Park team of sort of reimagining the operating model. So we're confident that we've been able to take out 85 million in permanent cost. It's about 1200 FTEs approximately across both hourly and management. And we're confident that that will huge and certainly deliver huge benefits for shareholders as we move forward. The one benefit that we have on the labor side is obviously being 60% union and with those costs already largely baked in, we're not seeing some of the same challenges on labor front. We are seeing it at our non-union hotels. Key West is an example where labor and certainly Orlando, pockets of Florida that are a bit more challenging. But we're not seeing huge increases on the labor front. Let me hand it over to Sean if he's got additional comments he'd like to make. Sean Dell’Orto: Sure, Tom. Thanks. And yes, certainly what Tom mentioned is really kind of our doing in limiting positions. But you think about some of the operating model elements or whether it's housekeeping or changes F&B, because those things are still evolving. It's hard to kind of sit there and I think at this point put dollars at it. We still need the right mix to come in through to kind of test some of these changes to the standards out and the take rate and everything there. So that's kind of evolving and a work in progress, but we're certainly confident that we'll kind of add -- be additive to the 85 million Tom discussed as we move forward and ramp back up.

Great. And then just as a follow-up. In your prepared remarks you mentioned to focus on value-added transactions in projects. But it looks like you reduced CapEx to $56 million for maintenance projects this year. Just going into 2022, how do you think about spending there? And are there any major projects on the horizon?

Yes. We -- as we mentioned obviously the Bonnet Creek, we have reinstated both our expansion there of the -- meeting footprint for the Waldorf as well as the Hilton. So that's north of a $100 million project there that is underway. Very confident that that's going to be a huge success for us. We're also going to be renovating that. The meeting space as well as some of the guest rooms as well. We've also completed recently the meetings of space at the Hilton San Francisco. We've also done some a partial renovation of the TAPA Tower at Hilton Hawaiian Village. So you'll see that those costs really ramping up both on the maintenance side as well as on the embedded ROI side for the Park portfolio. We've got a number -- DoubleTree San Jose is one that we're pretty far along in planning and are plan to convert that to a Hilton as well just another example.

Thanks.

Our next question comes from the line of Neil Malkin with Capital One Securities. You may proceed with your question.

Hi, good morning everyone.

Good morning Neil.

Hey. I'm just wondering if you can give an outline just kind of what you see for group outlook pace or how do you want to qualify it for your San Francisco and Chicago markets heading into again like I said in 2022?

Yes. If you think about San Francisco 2022 city wides I think right now in the books about 34 events, about 620,000 room nights. And if you look back to 2019, which I think was an all-time high at about $1.2 million room nights. So, clearly continuing to ramp up. I think JPMorgan proceeding with the healthcare conferences is a great news. And I think as you continue to get more people back to say, we weren't returned to office and back to business travel. We fully expect that market will continue to thrive. As we look out in Chicago in a corporate group there, our group pace is about 83% of the 2019 levels. That's about 168,000 room nights plus or minus city wides are also I think of over 700,000 room nights in Chicago. So, very encouraged. Chicago has really held up better since we reopened back in June of this year. So encouraged about both of those markets as we move forward.

Appreciate that. One of the things that the group guys, the group focused owners saw was a pretty significant pickup from second quarter to third quarter on the group side, and obviously significantly below 2019. But compared to the first and second quarter, I would say a pretty significant step function higher. And that also came with a pretty stronger than expected. I think F&B [ph] overall. I was wondering if you can comment on what are the spending habits as those groups kind of bread and butter groups start to come back? Are you seeing the same amount of willingness in terms of like minimum spend? Any different or changes in preferences for like banquets or group gathering sessions. And also I think it spills into the other revenues which have been just on fire and maybe you could shed some light on what's going on there as well? Sean Dell’Orto: Yes, Neil. This is Sean. I think in the end that the groups are generally behaving consistent with what they were doing pre-pandemic. I mean, obviously, the overall participation is lower than 2019 as they show up. But I would say as we kind of project out and plan for an event I think generally it's been pretty consistent that we're underestimating the participation. So the good news is they are showing up. And with that planning and everything else I think too [ph], they're also showing up and realizing they want a little more than they planned for two. So I think you're seeing some kind of incremental spin when they're on site. They're not necessarily -- participants aren't necessarily leaving the assets a lot and going out and doing, seeing alternative outlets or F&B experiences or kind of mostly, a lot of times staying in the hotels. clearly that's happening with the leisure side too. So we're seeing a lot of benefit in outlets in certain areas there. Certainly some out-of-room spend where we have the amenities like golf, bonnet and everything else are seeing upticks as well. And that's been consistent. As we've been open and kind of in kind of good kind of elevated operations or elevated demand levels in different parts of this pandemic.

Okay. Thank you.

Our next question comes from the line of Gregory Miller with Truist. You may proceed with your question.

Thanks. Good morning. Just one question from my end. As we look to thanksgiving and the December holidays, I'm interested in how your cold weather markets may fare this season? And the extent of pent-up leisure demand that may be shifting back up north. So, if possible, could you share your initial expectations for markets like New York City this year relative to pre-pandemic years? Sean Dell’Orto: Yes. Greg, this is Sean. For New York specifically, clearly a good news story happening up there, opening up the asset early October and has really ultimately exceeded our expectations as we looked at our reopening models for October. And as we get into November, December, clearly the holidays are part of the success for this asset. And so, what we're seeing right now for New York is Thanksgiving is pacing around 80% of 2019 levels with sellouts for Wednesday and Thursday with ADR flat. So feeling good about how we're coming into that week. Earlier than that we have a sellout around the New York city marathon this coming weekend. So I think again, November is shaping up pretty well for the asset. And then as you get in December, we're seeing certainly on the weekend some real good strength there of about 60% to 70% committed occupancy with the asset. So, I think we've got a good base and I think we're continuing to see positive pickup volumes at or above the comp set in the market there. So feel good about New York. And obviously, feel really good about our resort areas where you would expect strength around the Holidays. Hawaii is looking good despite the governor kind of putting a pause and a little bit of pause and hesitation on booking the holiday travel. We're now seeing the pickup…

That's all sounds great. I appreciate all the detail there, Sean. Sean Dell’Orto: Thank you.

Our next question comes from the line of Chris Woronka with Deutsche Bank. You may proceed with your questions.

Hey, Chris.

Hey, good morning, Tom. So, heard your comments about a potential. When we think about acquisitions maybe some kind of joint venture where you can contribute an asset mark-to-market on that and then add more liquidity for acquisitions. And so, the question of that is just on any potential acquisitions, is this something where -- given where we are the recovery is coming along faster, gaining steam. You're going to go for something that's yielding right now that doesn't have a ton of story to it. Or would you prefer to do things that have a story to them and value add?

Yes. It's a great question, Chris. And as you know, it's -- we're talking a hypothetical here we're thinking. In a perfect world I think finding something that is cash flowing, but that we could plug in our best practices and our asset management team and the men and women on our design and construction team for some value-add over time, would probably create the most upside and clearly with something within place cash flow is certainly attractive to us as we look out. But we'll evaluate. There are sometimes really deep turns that can make sense, but that's really better suited I think in many cases for private equity than it is for perhaps a re-capital structure. We'll be thoughtful We're not -- we don't feel the need. People - I think it's important for listeners to remember, we've bolted on 18 hotels. From the Chesapeake deal we have tremendous embedded opportunities within the portfolio, whether it's the DoubleTree in San Jose. The DoubleTree in crystal city at the front door of the amazon campus there. Literally at the front door Hilton Hawaiian village on the long term we're getting a site entitled that we've got an option to that will allow us to do a six tower. Now that's a few years out as we sort of look out. The Hilton Santa Barbara that we converted. We up branded. Bonne Creek which were also out branding to a Signia. I mean, there's huge upside within this portfolio. So we want to be really thoughtful about acquisitions. We're going to grow -- make no mistake that as this recovery continues to take unfold, as it unfolds that Park will be a participant both in buying assets in addition to continuing to recycle capital within our current portfolio.

Okay. Very helpful. And then how do we think about the puts and takes next year with international coming back both ways inbound, outbound. And for you guys, Florida big beneficiary this year of state domestic. And then you're going to get more international inbound next year. Is there a way to think about from a maybe a rate perspective what happens when we kind of see more Americans going abroad and more international guests coming into your markets maybe other than Florida. Is there any way to just directionally think about that?

Yes. First of all I think it's going to bode very really well for not only the industry, but I think for Park in particular. If you think back to 2019, we had inbound international of about $79 million. And outbound from the U.S. was about 100 million plus or minus. That may be a little off Chris, but I don't think much. And so, when you think about what's happened here during the pandemic, those hundred million travelers plus or minus were all really focused on U.S. or the Caribbean. Some going international, but largely those that were traveling were focused more kind of U.S. centric. I think as we're coming out of the pandemic, we're going to begin the journey to get back to the way things were. Meaning, you're going to see more and more of those international travelers coming back into the U.S. and think about where they want to go. They're not likely going to San Antonio. They're looking and I love San Antonio, but they're looking more for New York, Boston D.C., Chicago, San Francisco in addition to the Florida Miami. All of those markets where Park is incredibly well positioned. So we see this being really positive for us. But I also think we can't lose sight again of the pent-up demand we have been through two years help [ph]. And I think this sort of revenge spending and this desire to get out and reclaim and recapture people's lives is only going to continue to accelerate. Our aim for an industry that in our market where you've got less supply risk, we think we finally benefit from having our supply exposure. It's about 1.7&. I think among the lowest in the lodging REITs given our footprint. But we think that that's only going to bode well for us and having more pricing power. And I didn't even talk about Hawaii. Keep in mind, Hawaii, historically it's about 30% international of that about 60% of that, 63% I think to be exact relates to coming out of Japan. While Japan, Japanese have been coming the last 30 years consistently 15% to 17% of that market. So now you've got two years where they haven't visited. So I think Hawaii gets the double benefit, getting more and more penetration coming from the U.S. in addition to seeing the international, particularly the Asian trade beginning to really ramp up. As Sean said, that's probably second quarter. I mean, we think we'll have a really strong holiday. But we think as you look out to Hawaii and particularly now with international travel and six markets in particular driven largely by Japan will continue to only benefit that market as we move forward. So the international is nothing but a significant tailwind for the industry and I think for Park in particular.

Okay. Very helpful. Appreciate all the thoughts. Thanks Tom.

Thank you.

Our next question comes from the line of Robin Farley with UBS. You may proceed with your question.

Great. Thanks. Most of my questions have already.

Good morning, Robin.

Good morning. How are you? Most of my questions have already been covered. I guess maybe just one follow-up and you sort of touched on a little bit. But just in terms of the transaction environment, low interest rates out there and some types of buyers that can be much more leveraged than a public lead. I guess is that -- do you foresee that kind of making it difficult maybe to make some of the acquisitions that you might be thinking about?

Yes. It's a great question, Robin. There's no doubt there's -- the world is awash with cash and I think that's only going to continue. And clearly the lowest cost of capital wins and there are what I would call some of the trophy real estate if you will and we're seeing some of that trade at sort of eye-popping numbers at these 2.5 million a key, not likely to be where Park is going to be trading. And we're most interested. So, I think you'll find whether that's the sovereigns, the high net worth, some of those family offices, perhaps will be in the hunt for some of that. We're confident just given our relationships that we'll be able to find very attractive opportunities. And we'll have to be selective. We'll have to work a little harder, but historically my lead teams have always done well in finding off market and those deals that are compliant. We also will have the ability as our stock continues to recover to use op units and have the optionality of being able to structure deals that can also be attractive for certain types of sellers. So, we'll use everything in our tool kit to make sure that we're creating value for shareholders.

And I'm also thinking about your comments about the asset value and what a significant discount you're trading. In the past you have actually sort of given targets for asset sales. Any thought that, I mean, if the public market's not valuing them and you get more value by selling them, would you think about actually giving a target for asset sales?

Yes. It's a another fair question. All options are on the table. I mean, we are committed to creating shareholder value and as I've said, we'll get paid either by the public markets or the private markets and we're serious about that. And we will continue to work hard and create value for shareholders. And we do expect as the recovery takes hold and continues to accelerate I think some of the fears and concerns of the New York, San Francisco's and Chicago's of the world will certainly subside. These are great cities of the world that people that are betting against them and my humble opinion are making a unwise bet. These cities are certainly going to be coming back.

Okay, great. Thank you very much.

Thank you.

Our last question comes from the line of Bill Crow with Raymond James. You may proceed with your question.

Good morning. Thanks.

Good morning, Bill. How are you?

Good. Thank you. Quick clarification and then a question. Clarification on the Hilton Midtown. Is it fully open, all 1800 rooms open. I had read that it was going to be partially opened? Sean Dell’Orto: Now, all rooms are open, Bill.

Hey, Bill, as Sean said and we fully expect a near if not a full sell out for the marathon this weekend. So it's ramping up better candidly than any of us thought. And I've been to New York three times here in the last couple of weeks and the City's coming back. It's coming back to life and it's great to see.

Yes, good. Okay. The question really -- let's just take a crack at the labor question from kind of a different angle, which is -- and aside from your union contracts, how much do you think labor ha labor wage rates have to rise over the next year to get us back to an equilibrium? We're not talking about a deficit, man hours and increased turnover relative to history?

Yes. As always Bill thought provoking and a reasonable question. It's a tough question, because I think you got to think about individual markets. If you look at New York as an example or any of the other major cities, I mean we're paying pretty significant wages as you know, well north of $30 an hour plus or minus in any of those cities. So some of that pressure that we have and some of the turnover that I think some of our peers and others are seeing we're just not seeing it. There's seniority. They're recall rights. If anything we would -- we think there's an opportunity to continue to work hard to right-size to find the right balance they're going to be continued advances in technology whether it's digital key and other applications and these changing customer preferences have got to be factored in, we all know it. It's expected. And I think that's going to continue to be a benefit for the industry. There'll be some pain pockets as we unfold, where I think we see more of some of the labor challenges are markets like a Key West or Orlando where there were some leased labor and other opportunities where you don't have the affordable housing and it's just a tougher market there. And you are seeing wages rise, but the other side of that as Sean pointed out, I mean, if you think about just third quarter our two Key West assets, RevPAR was up 88% over 2019 levels and that's only going to continue to accelerate. Part of that's pent up demand and people wanting to reclaim and recapture their lives. So I don't know whether Sean you've got some other insight on the labor side. But I -- it's one that we'll study some more Bill and then follow with you offline and just make sure that we answer your question appropriately.

Yes. Appreciate it. It seems like the smaller mid-size markets may have more pressure from competition from Amazon warehouses and things like that than maybe some of the large markets.

Yes. We're not seeing it, Bill. And the one thing I'd say Bill and you and I both been around a long time. I just think the one thing as we look out I think there's more optimism. I think there's more optimism for having pricing power, for having margin growth, the supply growth as you look out even over the Park portfolios. I think I said earlier about 1.7%. There's some -- while it's been a tough, tough nearly two years. There are reasons for having real optimism as we move forward. I think finally we get back to this being a certainly more attractive business than it has been from a hotel ownership in the past, certainly in the near term in the last couple years and certainly the end of the last cycle.

Right. We can all to know you some optimism. Appreciate that.

Thank you Bill. Stay well.

Ladies and gentlemen, we have reached the end of today's question and answer session. I would like to turn this call back over to Mr. Tom Baltimore for closing remarks.

We appreciate the opportunity to visit with all of you today. Look forward to seeing you in person in the near future. Although I know the upcoming navy will be virtual. We will be on the road and have been over the last several weeks and really be reaching out to many of you to get together in person. So, stay healthy and look forward to seeing you soon.

Thank you for joining us today. This concludes today's conference. You may disconnect your lines at this time.