Greetings and welcome to Park Hotels & Resorts Incorporated Second Quarter 2024 Earnings Conference Call. At this time, all participants are on the 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, Ian Weissman. Thank you. You may begin.

Thank you, operator, and welcome everyone to the Park Hotels & Resorts second quarter 2024 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. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements. Please refer to the documents filed by Park with the SEC, specifically the most recent reports on Form 10-K and 10-Q, which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements. In addition, on today’s call, we will discuss certain non-GAAP financial information such as FFO and adjusted EBITDA. You can find this information together with reconciliations to the most directly comparable GAAP financial measure in yesterday’s earnings release as well as in our 8-K filed with the SEC and the supplemental financial information available on our website at pkhotelsandresorts.com. Additionally, unless otherwise stated, all operating results will be presented on a comparable hotel basis. This morning, Tom Baltimore, our Chairman and Chief Executive Officer, will provide a review of Park’s second quarter performance and update you on our 2024 outlook. Sean Dell’Orto, our Chief Financial Officer, will provide additional color on second quarter results and full year guidance and an update on our balance sheet. 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. It was another very productive quarter for Park, as we continue to improve our balance sheet, execute our capital allocation strategies, achieve solid RevPAR results and benefit from stronger than expected gains from our recently completed value enhancing ROI projects. We have made considerable progress over the past two years, repositioning our balance sheet with further progress made during the second quarter, as we extended our debt maturities by refinancing our $650 million of senior notes that were due in June, 2025. Leaving no material maturities to address until Q4 2026, and continue to make progress with our efforts to dispose of non-core assets with the recent JV sale of Hilton Torrey Pines, including the two San Francisco hotels and receivership, we have now sold or disposed of 43 hotels for nearly $3 billion since the spin. In terms of capital allocation, we repurchased nearly 1.7 million shares of our common stock for $25 million at a significant discount to net asset value. Operationally, results continue to be driven by solid leisure performance in Key West, Orlando and Miami, coupled with improving group and business transient demand trends in core urban markets, including New York and Boston. In Key West our Casa Marina Resort reported stronger than expected results following our $80 million comprehensive upgrade, which was substantially completed last December. RevPAR at the hotel increased by nearly 215% over the same period last year and achieved the highest food and beverage revenue quarter on record with several groups adding or expanding events throughout the second quarter. Performance at Casa since the completion of the renovation has been extraordinary and has exceeded our initial underwriting, with the hotel on track to generate hotel adjusted EBITDA in excess of $31 million in 2024 or 35%…

[Operator Instructions] Our first question comes from Floris Van Dijkum with Compass Point.

So I want to talk a little bit about or maybe if you could expand a little bit more on capital allocation. Obviously, you’ve got some attractive redevelopments that tend to pay back within a pretty quick period as we’re seeing in Key West and Orlando, you’ve bought back some stock. Maybe the other thing that if we could expand on a little bit more in terms of your potential asset sales, I think in the past, you’ve said some non-core hotels could be sold before year-end. What could we expect? And where do you think proceeds will be spent on between redevelopments and buybacks?

Let me just start with sort of the first priority for us. And as we think about 2024 is really operational excellence. It’s to achieve our operational targets, our guidance and obviously to continue to work with our operators and really reimagine the operating model want to point out, I think we’ve made a lot of good progress there and really thinking about the business and how we can be more efficient. We’re sort of anchored there. You’re right, we each year set a goal of continuing to sell or dispose of non-core assets. If you think back to the prepared remarks, we noted that we have sold or disposed of 43 assets now. That does not include Oakland at this point, but that’s about $3 billion. So the team has worked incredibly hard to reshape the portfolio. We have said that our top 25 assets really account for about 90% value of the company. So, there’s another 10 to 15 hotels easily that we are actively looking to recycle that capital. Each of them has its own story, whether it’s a low tax basis, a joint venture partner or other challenges. But our team led by Tom Morey, our Chief Investment Officer is working their tails off as we continue to make progress there. We also set a target this year of $100 million to $250 million. We are confident that we will make significant progress against those goals. And then we’ll use those proceeds as you’ve seen us do in the past. It will be a balance between reinvesting back into our portfolio. We think that’s really the key priority for us. You’ve seen, obviously, the extraordinary success that we’re having with Bonnet Creek already and then Casa. Casa probably finishes the year at a RevPAR in excess…

Maybe if I can have one follow-up for Sean. I know it’s very early, but if you can share some ideas on options for the refinancing of the CMBS debt on Hawaii Village. Sean Dell’Orto : Yes, Floris, Certainly, taking a look at that. Certainly, the positives of the efforts we’ve done over the last few years is certainly to expand the options that we have available to us. We’ve obviously accessed the bond markets. We certainly have other institutional debt markets out there available to us, whether it’s term loans, term loan A or B. We successfully did the $200 million term loan A with the banks were very supportive. So despite, I think, discussions around bank capital being scarce, which I think still is, I think we demonstrated we can access that market as well since we repaid them coming out of the pandemic. So we’re looking at all those kinds of options. We’ll also look at CMBS as an option. I don’t necessarily want to just repeat and have another $1 billion plus outstanding on the asset, but that is certainly, I wouldn’t rule it out either. So we have a number of options available to us. We’re looking at it. We’re certainly sensitive to the pricing as we look at today obviously, the maturity as it comes up in ‘26 and getting ahead of that next year. So we’ll have more color as we kind of progress over the next several months as to how we want to attack it.

Our next question comes from Smedes Rose with Citi.

I just wanted to ask a couple of things. Just on the maintaining the midpoint of your EBITDA guidance, and it sounds like you have, I guess, $8.5 million of benefits between the tax credit and the lower insurance expenses. But then is there also something may be factored in for closing Oakland because it seemed like that was running at a loss. So will that help support your EBITDA guidance? SeanDell’Orto : Yes, Smede. So just to clarify, the property tax credit in Chicago and the insurance benefit for the remainder of the year that really equates to $6 million. It’s about, call it, rounded $4 million on insurance and $2 million on Chicago to kind of get to the second. Oakland is not in our guidance, as we mentioned, certainly a potential headwind -- I’m sorry, a tailwind for us, depending on when it closes the asset, as we noted, on a trailing basis, lost more than $3 million. So you can kind of probably back into kind of a quarter’s worth of that as a potential tailwind for us. But I think we feel comfortable kind of assessing the risk out there. Clearly, we noted Hawaii being that, the chief risk out there from a leisure standpoint. On other leisure markets like Orlando and Key West, we’re certainly demonstrating strength there from the investments we’ve made, spending a lot of share from those assets, I think is performing well in those markets despite those markets being actually down performing below 2023 levels. So we feel kind of good. Group has held up strong since relative to what we forecasted even at the beginning of the year. And I’d say IBT, individual business transfer has also been a welcome surprise and healthy year-to-date thus far. So we think we forecasted again, the risk on the leisure side. I also think that we have potential benefits. There’s a little more risk out there on some of these other components that might offset that going forward. So we feel good about where we are at [675] midpoint.

And can you maybe speak to kind of maybe the ranges of RevPAR growth you’re thinking about for the third quarter versus fourth quarter? I think you talked about that on the first quarter call, I think that ranges for the second quarter, could you share that through the balance of the year?

Yes. I think, look, there’s a lot of uncertainty, Smedes out there. I think we all know and you’ve got, obviously, the geopolitical. You’ve got, obviously, will the Fed began to ease on rates. Obviously, the consumer is certainly feeling more stress. So we don’t want to ignore that. Hence the reason that we were pretty thoughtful about raising and lowering, obviously, the top end of our RevPAR guidance. And having said that, I do think that there is a really compelling story for Park. We’re expecting the third quarter to be strong. And the components of that are really the group pace is up 13%. If you think about August, as an example, August already group pace north of 30%. September group pace up around 22%. So that’s probably about 330,000 rooms just in those two months. If you look at New Orleans, group pace up about 69%, Chicago is up about 34%. Bonnet Creek up about 33%, Denver up north of 35%. So that really provides a great tailwind for us. And we said gave a range last quarter and sort of had to backtrack. So we’re hesitant to give a range this quarter. We feel very good about how things are tracking for the third quarter. And certainly, low to mid-single digits is probably, but I don’t want to give any specific numbers. But probably in that range is something we feel reasonably comfortable with at this time.

Our next question comes from Duane Pfennigwerth with Evercore.

So you’ve disclosed the headwind RevPAR and earnings from renovations this year. I think it was 50 bps to RevPAR and $9 million to EBITDA. Any early views on how you’re thinking about renovation or displacement headwinds in 2025?

Yes. I would say, look, it’s probably a little too early other than to make this global statement. Sean and I and the team worked really hard to not be the construction story. So we try to be very, very thoughtful and think about this year, where we’ve got, obviously, Rainbow Tower, we’ve got the Palace Tower. We’ve got New Orleans, and we’re confident in about 50 basis points of RevPAR disruption and about, obviously, $9 million in EBITDA as we communicated. We always want to be under 100 basis points. Next year, obviously, we’ll have second phases of both the Palace and Rainbow Tower. And then, of course, we’ll have a little more work in New Orleans and then, of course, Royal Palm, which will be our next what we would call, really big transformation and we couldn’t be more excited about that. Our asset management team and our design and construction team led by Carl Mayfield, really are best-in-class. We work and seamlessly hand in glove to figure out really the best windows to renovate, have materials on site, have the contractors lined up. And we’ve had a lot of success, and I think we’ve demonstrated that time and time again. So we’ll work hard to really keep that disruption under that 100 basis points is a really guiding principle for us. But I don’t want to say anything more than that other than, look, there isn’t anybody better in the sector than us and this team and how we handle those renovations and those of you that have seen Orlando, I think would really certainly agree with that statement.

And maybe just thoughts on Hilton Hawaiian Village, and how the team thinks about the new normal beyond this year. Why is that asset in that market different than other markets that have surged and begun to normalize? Why do you think the floor is now higher on that asset?

Yes. A couple of things on Hawaii. Obviously, second quarter, we had about 213 basis points of drag on Q2 RevPAR. For the reasons we all know, obviously, the weakening yen, the surcharges on travel. And we began the year the visitation historically from Japan has been about 1.5 million into Hawaii into the islands. We were about 600,000 last year. We expected that, that would be about 850,000 to 900,000 this year in calendar year ‘24, looks like it’s trending right now at about 770,000 approximately. So about 10% sort of lower. It’s still up 34% to last year, but still about 50% below sort of pre-pandemic. So if anything, we look today and say, with obviously the Bank of Japan beginning to adjust monetary policy. And if you can get that moving in the right direction. And given the pent-up demand, Japanese have consistently been strong visitors to Hawaii for north of 30 years and more. And we don’t expect that to change. So we just think it gets elongated. And really, we thought we’d be back pre-pandemic in ‘26, it probably gets slightly extended. Obviously, that can change if the financial conditions change. But we remain steadfast. Hawaii has been the strongest market over the last 20 years, when you think about just some of the stats that we gave in our prepared remarks, that we don’t see that changing, impossible to add near impossible to add new supply. We’ve got just a fortress position, obviously, 22 acres, oceanfront. We are working on adding a six tower there, which we couldn’t be more excited about and have been a long-term great corporate citizen and partner there with all of our stakeholders. And so we are very, very bullish on Hilton Hawaiian Village in a way long term.…

Our next question comes from Ari Klein with BMO Capital Markets.

Within Q2, can you parse out how much of the 200 basis points in low RevPAR of Hawaii versus the rest of the portfolio? And then the second half of the year, was effectively lowered about 25 basis points in terms of RevPAR, when accounting for the 2Q shortfall. Is that all Hawaii? I guess that the group pace underpins expectations. But Tom, you also talked about some things that are uncertain around the consumer and the macro. To what extent is that factored into the second half outlook? Sean Dell’Orto : Yes. I mean, I would say a good portion of Q2 was Hawaii. We saw certainly a continuation from what we saw kind of in April through most of the quarter on the transient side, a little bit as well in New Orleans, I would say they’re kind of the key ones storms do have a lot of strong pace backdrop group in second quarter. So, certainly some softness there. But I’d say those are kind of the key contributors for the most part, in terms of versus expectations for Q2.

Yes. Ari to keep in mind, we gave last call, I think, a range of 3% to 5%. And at the time, we felt comfortable with that, but to Sean’s point, I mean, we were down 213 basis points in second quarter and we ended up 2%. So you’re really back to midpoint. So, largely driven by Hawaii a little bit, obviously, in New Orleans. Denver also on the transient side, a little softer. But the big issue in the second quarter was really Hawaii from that standpoint.

And then just a second half outlook, kind of what’s implied outside Hawaii in the RevPAR guide, given some, I guess, concerns around the macro and the consumer?

Yes. Well, listen, there’s a lot of uncertainty out there and we don’t want to be pollyannish and not acknowledge and we’re watching carefully. I do think that we’re in a unique position because as we started the year, remember we had 150 basis points of tailwind from the transformation at Bonnet Creek and also Casa. But as you sort of think about Bonnet, we’re probably looking at RevPAR’s north of 20% and bounded in the third quarter. New Orleans, we’ve got the huge increase in group. We’re probably 20%, 25% or more there. Chicago, Europe, significantly 34% in group pace in Q3, you’re up double-digit RevPAR. Boston looks good, high single-digits. So we’ve got a number of things, Denver, very strong group pace. So just given the diversity of our portfolio will really help to offset some of the softness that we’re seeing in Hilton Hawaiian Village. But again, we’re still expecting that’s low single-digits. Based on how we look today. So we’ve adjusted based on the best information that we have today. We’re watching the macro like we all are. No doubt the consumer is feeling them a little stress and certainly being more value conscious. And I think it sets up well for hopefully the Fed to ease and to begin that process. But we’re watching carefully. And we sent the signal, as you may recall, during NAREIT and we could see then that demand was softening a little bit. And I think we were certainly one of the few to point that out, which I did pretty openly at NAREIT with in our meetings at that time. We’re not seeing that. As I said, we’re looking at on the Hawaiian Village right now in July is running 95%. That’s north of 2,800 rooms, and we’re running 95% occupancy right now.

Our next question is from David Katz with Jefferies.

So I wanted to go back and everything appears to be working as well as it could be and the backdrop will be what it will be. But just focusing on the non-core assets and the possibility that they could go in the form of 1s and 2s versus sort of some larger bites. And with this change in backdrop, do you think that it potentially creates a headwind to getting anything else done from here?

You and I’ve had this conversation many times. No one is more focused than women and men on the Park team on this. We think there’s a mini overhang, if you will. And as we’ve said, look, the top 25 assets are really the core part of the portfolio. We are working hard to accelerate that pace. And that means look, we’re confident that there’s debt markets are improving. Part of it is that each of these assets has some different unique challenges, whether it’s lease duration. It’s a tax issue, a partner. But we get it. We understand the sooner we can do that, the better off we will be in the more optionality. So message has been delivered. It’s delivered to me to the team every day, and we’re working hard to make progress there. And we’re not looking for perfection. We recognize that these are assets that are non-core and we’re working hard. I think you’re going to see some continued productivity and see evidence of that. And look, Oakland is a great example. Losing money, short-term ground lease, undesirable market safety security issues. We didn’t waste time. We went into action on that, and you’re going to see other situations like that, where we’re also going to continue to move quickly here. The core value and if you think about some of the recent trades that have happened in Hawaii, just as a data point, our asset is a whole lot better. And if assets are trading at 16x to 17x what do you think Hilton Hawaiian Village is worth a lot more than that. And I don’t think you would dispute there.

Our next question comes from Chris Woronka with Deutsche Bank.

So Tom, I have a non-guidance, non-Hawaii questions for you, if that’s okay. And it relates to first one on Key West. Obviously, some really impressive numbers coming through this quarter, last quarter is 2024, is that kind of the peak for those two assets post-renovation? Or do you think there’s still more to go? You’re having great success on the rate. I think you might still be a little below on of, which might be intentional but do they still have legs in ‘25 and beyond?

We really believe they do, Chris. I mean if you think about the Dorado restaurant that has yet to open, it will be soon. The bar is opened, just the quality of the renovation. There’s no better asset in that submarket now. We really were thoughtful. And again, credit to Carl Mayfield in our design and construction team and how thoughtful we were in creating really just a phenomenal product. And then having, obviously, the peers redone, both the group -- high end group we going coupled with obviously, the high end leisure, it’s a really repositioning of a world class asset. So we couldn’t be happier and prouder. And we think clearly there’s going to be continued upside there. And we gave you stats as to how it’s performing today, but even the reach. I mean the reach is an example of that where of 7%, but we’re still up 56% plus or minus over -- in rate over 2019. So we think the cost has got plenty of ramp up room and running room, as we move forward.

That’s great to hear, Tom. And then I guess, we can keep it in Florida and go to Orlando and you guys are, again, you’re having good results this year with the repositioning. A lot of your peers are not having great results this year there. It’s a tough market for a lot of reasons. Similar question, which is can you guys outperform there again next year if the broader market remains tough and do you have any indications? I think you had someone from the – I remember being in the room in Orlando. I think they were a bit more optimistic about ‘25 just based on the, I guess, some of the city wides that might come in, but any thoughts on that?

Yes, listen, we remain very bullish in Orlando. If you think about, and I think sometimes people forget, it’s the most visited destination in the United States, 74 million visitors, I think is part of that presentation that you and many others attended. Think about Vegas, now Vegas has the gaming Orlando doesn’t, but that’s about 45 million, I think, plus or minus. The other thing to keep in mind is you’ve got Epic Universal opening next spring. And I think Universal is on record of spending $5 billion or more and 50 different experiences in 800 acres. So that’s going to be a huge tailwind for the destination. And then Disney is on record of saying they’re going to invest $60 billion over the next decade plus or minus, and certainly another tailwind as well for the market. So we’re very, very encouraged as we think. And then again, we are we’re well positioned. Think about that the amount of meeting space we have a completely renovated and reimagined resort coupled with a championship golf course. So look, the Four Seasons is the best market -- the best asset in that market and a huge RevPAR and but there’s plenty of running room to continue to raise our performance there, and we expect we’re going to continue to be a very, very formidable player. And no one has the waterside ballroom that we have. You saw it, you witnessed it, just the optionality that we have from a demand standpoint. And again, 225 days, it’s being operated and that’s in the first year. So we think we’ve got many, many years. And I think that’s part of the park story that’s more compelling than a lot of our peers are the tailwinds from reinvesting back in our portfolio. We believe passionately that’s the better play and will generate additional cash flow above what we can get from acquisition yields and paying some of the lofty prices that are being demonstrated right now.

Our next question comes from Dori Kesten with Wells Fargo.

I think in your prepared remarks, you said guidance assumes international demand trends improve. I was just checking, was that a portfolio-wide comment? Or were you specifically referring to Hawaii?

I think Hawaii is a good portion of that as I outlined, Dory. We expected demand coming into Hawaii to be about 850,000 to 900,000 visitors and that’s currently tracking at about 770,000 so that it’s a small -- obviously, at Hawaii is a 200 basis point drag in the second quarter. And we sort of walked you through how we’re trending and what we see for the balance of the year. We expect, obviously, Hilton Waikoloa is going to continue to be a drag, but we knew that given the fact that the group pace is down 48%, and we think that’s probably low 40% for the balance of the year. But again, that rebounds pretty quickly to pace is up 80% next year. We’re obviously looking at completing half of the renovation of the Palace Tower. So we’re going to use that period to take advantage of it. And obviously feel very good about Waikoloa and how it’s trending for the balance of the year as well as we look out to the out years. But clearly, a little bit of softening there versus what we thought going into second quarter for all the reasons that we’ve outlined and discussed with other analysts that have raised the question.

But so for the remainder -- just so I understand for the remainder of the portfolio or just park as a whole the assumption is for the rest of the year. International inbounds continues to improve and you have a deceleration in domestic outbound. Is that a fair characterization?

Yes. It’s a fair question, Dori. If you step back for a second, you know this step as well as I do. But if you look pre-pandemic, right, inbound was about 79 million. I think the last year was about 63 million to 65 million. And I think the forecast was somewhere in that 67 million to 70 million overall visitation. No doubt the high-end consumer is still enjoying considerable time in international in particular. The Olympics are playing a role there. There’s no doubt that the success that’s occurring there is certainly diverting what people may travel to the U.S. otherwise. So that’s probably on the margin. But we’re very comfortable with the range of guidance that we’ve given for the balance of the year that 3.5 to 4.5 half to us seems very reasonable at this time.

Our next question comes from Jay Kornreich with Wedbush Securities.

As it seems that out of room spend remained elevated despite some transient booking softness, I guess, how does that make you think about just the overall health of the consumer? And do you see total RevPAR performing better than just RevPAR in the second half of the year? Sean Dell’Orto : Yes, I think in the end of what you’ve seen, I think you have seen just -- through the out-of-room spend, what the trends you’ve seen between group and kind of leisure transient on the group side from the F&B side, the strength really comes from banquets and catering, which are ultimately up 18% and certainly has exceeded our expectations for the first half of the year. So it’s really bankrupting supported by the group strength that we’ve seen in the leisure side, I think it shows in the out-of-room spend that outlets are tightly down a little bit year-over-year. Some of it is kind of a mix shift fundamentally, but I would say it does track kind of the trend we see of group strength and some leisure moderation. Over the back half of the year, I think in the end, we’ll see -- we’ll continue to see some outperformance on out-of-room spend relative to room RevPAR. So I think overall for the year, we kind of anticipated about 40 basis points to 50 basis points higher total RevPAR than room RevPAR. So I think that kind of puts into a little bit slightly better performance for the back half of the year and then room RevPAR.

Our next question comes from Robin Farley with UBS.

Just kind of circling back to the asset sales. Do you think it’s just a matter of waiting for some interest rate cuts before there is more movement there? Or is there anything else that you would like characterize about the buyer side of the market that could change or how you see that over the next six months? Is it just a rate cut or are there other factors?

I think, obviously, lower rates and certainly a more active lending environment. And candidly, I think once buyers have a little more comfort on what their cost of debt is and particularly, that can be reduced slightly, I think that helps. I think that’s going to help both buyers and sellers. I think we’ve been able to demonstrate, I mean, think through the pandemic and subsequent to that. I mean, every year, we’ve been able to advance and continue to sell non-core. We had 14 international assets. We were selling during the pandemic. So I’m not sure if there’s anybody more skilled that -- and each, again, a lot of these deals had a hair on them and joint venture partners in international and legal and tax issues. So we’re working hard on it. It remains a high top priority for us. And you’ll continue to see us put points on the board and show additional activity here for the balance of the year.

And maybe just one follow-up. In your conversations with potential buyers, do you get the sense -- you talked about all the things as interest rates and cost of their debt and all of that. Do you get the sense they’re worried at all about what’s happening with the consumer and what that means for the EBITDA performance of the property? Or do you think these buyers are sort of they would look through whatever might happen in the next couple of quarters because they’re long-term buyers. Like in other words, if we get interest rate cuts, do you think there are still -- do you think there -- potential asset buyers are concerned about the consumer as maybe equity change in are right now?

I think the answer is really depending on the buyer. If it’s a private equity shop that’s probably got a 5 to 7 or 7 to 10 year hold, I think they can look through some of the near-term noise and buy on a by pound or per pound basis and do quite well. Obviously, I had a private equity platform in the past. So I certainly understand that. I think family offices could also or owner operators as well, can be looking through. Uncertainty is the enemy of decision making. So if we get additional clarity and that’s geopolitical, you’ve got a pending election. Obviously, you’ve got the Fed probably being one of the more important issues that people are waiting for the Fed to begin the easing process. I think it looks more likely than not but we’ll all see. And I certainly think that will help as we move forward. We are active. We’re in frequent discussions with buyers of all types. So I think we’ve got a pretty good pulse on it in. Look, as I said, we’ve demonstrated time and time again, we’ve sold or disposed of 43 assets and that list is going to grow. We’re going to continue to reshape and clean up this portfolio and get it back to its core. We think with that core portfolio is the value of the company and it also gives us a lot of optionality as we move forward.

Next question comes from Chris Darling with Green Street.

Going back to New Orleans, do you have a view on the reopening of the Caesars Casino and the potential impact on the Hilton Riverside? Do you think that could be a meaningful tailwind going forward or perhaps just more incrementally additive?

I think it’s more incrementally additive. Look that hotel is probably about 65% group plus or minus. So certainly from an additive standpoint getting additional transient incremental group that we could get. I think it’s a positive for the destination. New Orleans, obviously, has always been a solid convention market. It’s always been a very good leisure market where it’s Achilles Heel. It really is on the corporate demand. But I think it’s a net positive. Look, we’re not in the gaming business. We do think it will be incrementally positive for us. And again, we’ve got additional 8 acres there and 5 million square feet of additional FAR. So we like our positioning in New Orleans, and we think, clearly, over the intermediate and long-term, there’s going to be a significant value that certainly can be realized.

And then, just one more on the noncore portfolio. Park, of course, there’s a handful of ground lease properties other than the Hilton Oakland with relatively near-term maturities. Recognize it’s a small piece of the portfolio, but is there an opportunity for you to probably extend some of those leases, maybe acquire the fee position in certain cases? Are you thinking about it at all like that? Or are you more so focused on kind of dispositions incrementally in terms of that portfolio?

Look, all options are on the table. We have a lot of experience and you think back again to the 43 that we have disposed of and international JV, all the domestic, the ports, all the different entities that we’ve dealt with partners. So all those issues, we’re laser-focused on what can create the most value for shareholders. And what can we move as quickly as possible. And so you’re going to continue to see activity there and see us put points on the board and make real progress.

We’ve reached the end of the question-and-answer session. I’d now like to turn the call back over to Tom Baltimore for closing comments.

We really appreciate everybody taking time today, and I hope you have a great remainder of the summer and look forward to seeing you at the various conferences in September and beyond.

This concludes today’s conference. You may disconnect your lines at this time, and we thank you for your participation.