Good day and welcome to the Xenia Hotels and Resorts Fourth Quarter and Full Year 2020 Results Conference Call. All participants will be listen-only mode. Please note, this event is being recorded. I would now like to turn the conference over to Cameron Frosch, Senior Analyst, Finance. Please go ahead.

Thank you, Andrew. Good afternoon and welcome to Xenia Hotels and Resorts fourth quarter and full year 2020 earnings call and webcast. I'm here with Marcel Verbaas, our Chairman, and Chief Executive Officer; Barry Bloom, our President and Chief Operating Officer; and Atish Shah, our Executive Vice President and Chief Financial Officer.

Thanks Cameron and good afternoon to all of you joining our call today. Clearly, 2020 was an incredibly challenging year and one that we will not forget anytime soon. As soon as the pandemic began to unfold, lodging demand collapsed. While the lodging industry continues to struggle due to the pandemic, we feel we have weathered the worst of this downturn and we believe that Xenia is well-positioned for future growth. Similar to the third quarter, we saw encouraging levels of leisure event during the fourth quarter. October occupancy was the high watermark since the beginning of the pandemic, after which we experienced a slight slowdown in November and December as a result of seasonality in demand and more significant restrictions that were enacted as COVID cases increased in many markets. Corporate trends and group demands continue to be limited as it was throughout the upper upscale and luxury segments across the U.S. Our results for the quarter were reflective of the weak overall industry fundamentals. During the quarter, we had net income attributable to common stockholders of $24.3 million which was aided by gains on the dispositions we completed during the quarter. Adjusted EBITDAre was negative $10.1 million and adjusted FFO per share was negative $0.24.

Thank you, Marcel. I will be discussing our property performance for the fourth quarter, our continued success in operating our hotels in this difficult environment and an update on our recent and upcoming capital expenditures. On the same-property basis for the quarter, occupancy was 27.8% in average daily rate of one $182.64 resulting in RevPAR of $50.82. This same-property basis includes 34 of the 35 hotels owned as of quarter end which excludes Hyatt Regency Portland. These 34 hotels were fully operational throughout the entire quarter. This reflects a decline in RevPAR of 68.5% as a result of the 45-point decrease in occupancy and a 17.5% decrease in rate compared to the same time last year. RevPAR was down 66.1% in October, 71.6% in November and 68.3% in December. For the following operating metrics I'll be referring to our 34 same-property hotels. These metrics are based on the number of days individual properties were open and operating. Since Q2, near the start of the COVID pandemic when we performed the rigorous hotel-by-hotel analysis and made the hard decision to temporarily suspend operations at the majority of our hotels to year-end, our hotels achieved 28.5% occupancy and an average daily rate of $169.60 resulting in RevPAR of $48.41. While the absolute amounts continue to remain unprecedented, we were pleased overall with our portfolio's performance as our hotels exceeded our anticipated performance levels through the fall and holiday season. October's occupancy was 33.8% and an ADR $192.82 hit significantly by the 18-day buy up at major league baseball at Park Hyatt Aviara. As a result, November saw a decline in occupancy to 25.9% and an ADR of $176.71. December occupancy declined over November to 23.7% with a slight decline in rate to $174.37, a strong performance over the holiday weeks was not…

Thank you, Barry. I will cover three topics today. First, I'll provide an update on our liquidity and balance sheet. Second, I will discuss our monthly cash burn. And lastly, I'll provide some thoughts on our business outlook as we look forward. Starting with our liquidity and balance sheet. Having balance sheet strength is always been a key focus for the company, through the variety of actions we undertook last year, we further enhanced our balance sheet. As mentioned before, we have no near-term debt maturities. We diversified the balance sheet by adding high yield debt to our mix. Now we have this tool available as another source of debt capital for future growth. Having amended our corporate credit agreements three times over the last year, we enhanced our relationships with existing lenders. We are confident in our ability to work with them going forward. We have approximately $710 million of current liquidity, which represents years of runway at current business levels. Turning to my next topic, our monthly cash burn. During the fourth quarter, our average monthly cash burn was lower than expected. Recall that our expectations for average monthly cash burn was in the $13.5 million range at the end of October when we reported the third-quarter earnings. We estimate that our fourth quarter average monthly cash burns was approximately $9.5 million, inclusive of debt service and cash G&A expense. Turning down a bit, we estimate that our average monthly cash burn at the hotel level was approximately $2 million in the fourth quarter. These cash burn figures exclude capital expenditures. And in addition, these figures reflect formalizing the timing of certain expenses. We estimate that the forward dispositions reduced our cash burn by several million dollars during the fourth quarter. A portion of that reduction reflects our…

We will now begin the question-and-answer session. The first question comes from David Katz with Jefferies. Please go ahead.

Hi. Good afternoon, everyone. Thanks for all of your detail. We appreciate it. Look, I -- what I would like to do. I mean we are a bit on in this earnings cycle, and we've heard so much positive commentary around the back half of this year and the optimism for it, as well as next year. And we'd like to try and put it in context, right, and be balanced about it. Can you just put a little bit more sort of substance or detail around the back half of this year and early next year in terms of bookings and how we might evaluate their sincerity as best we can today?

Sure David. So, one of the things that give us a good bit of optimism actually for the back half in terms of group is what we're seeing on the rate side. And in fact, sitting here today, our group rate on the books for the back half of 2021 is actually higher than it was for 2019. So I think in -- in light of what we've been through, we view that as a pretty remarkable statistic. And what I can tell you is that as new bookings are being made, we're not seeing the ultra-competitive price environment that you might have thought we would see given that groups have a lot of options and a lot of hotels with availability for them. And I think part of that is that the groups that are booking right now are a lot of re-bookings. So, its groups that maybe didn't move right away, but now know they want it. They canceled their program, now they know they want to have it. So, they're -- they've chosen their hotel and they want to rebook at that hotel. And we're also seeing a lot of groups that I think are getting a lot of confidence around just where they want to be. And so as opposed to a market like Orlando where we might have seen historically a group come and look at four or five or a half dozen hotels, we're seeing them look at a couple of hotels and I think that's certainly changed the rate profile. From an absolute standpoint in terms of where -- what would be nicer on the books, they're down and they're down fairly significantly. We're looking at group pace to what we had the same time last year for 2020. The back half down around the 40% level, but given our particular portfolio, we do not -- most of the large majority of the group that's in our portfolio is corporate-driven, it's not citywide-driven, and it's not necessarily large association-driven. It's exactly the kind of business that we would expect to book short-term and what we're seeing in terms of how that's grown over time has been significant. I made a comment in the prepared remarks that from the end of Q3 to the end of Q4, we saw back half 2021 bookings increased by 35%. We think that's significant. And we've certainly seen that trend continue in January and February, and hope to report an even stronger profile as it relates to that metric by the end of Q1.

Right. And if I may sort of follow-up, I know there's been so much discussion about creating efficiencies and cutting costs. I heard someone adopt the expression recently about a lifestyle change rather than just being on a diet. How -- how -- how confident and Barry I'm guessing this is right up your alley, are you that this is going to be -- a lot of this will be a lifestyle change not just a diet?

I -- I think there is -- there's no -- I think that's actually a great -- great analogy particularly as -- as we've seen. All of us have seen friends and family some of them whose physical presence reacted well to COVID, and some of whose didn't in terms of the number of snacks they had while they were working from home. So I think that's a really appropriate analogy. I would have to give credit to -- to the author. But I -- if -- but it -- but when you -- there's no doubt, that we will come out of this when we're fully stabilized at with a lower expense structure in place, how the cadence to get to that I think that's going to be really interesting. And -- and one of the things that -- that we look at really every day in the portfolio is what are the FTEs in the hotel? What business are they serving? How is that going to step up month over month as -- as hotels in the portfolio go from 30% to 40% to 52%? In some cases in our portfolio are now 70% 80% 90%. I can see we're seeing in some hotels. And are we able to maintain that level of employment, if business does not maintain at those levels? And that -- that's going to create a huge thing challenge I think if -- if there are any peaks and valleys to -- to how business kind of unfolds. And when you look at potentially depending on the market's softer seasonal months, in some case that may be May, in some cases that may be -- so it'd be interesting to see how that happens. I think -- but I do think a lifestyle change…

Perfect. Thank you very much.

The next question comes from Michael Bellisario with Baird. Please go ahead.

Good afternoon everyone.

Good afternoon.

Barry just one more for you on the group front, could you maybe give us a sense of where the bookings are actually occurring and -- and how your -- and how some of your bigger assets are actually performing? Do you see any differentiation? And -- and I know you mentioned Orlando, but -- but Houston versus Portland which is still close, then maybe Santa Clara that's a little bit more impacted from a fundamental perspective. Any other color there would be helpful.

Sure. It's actually interesting and that the -- for the most part if you look at the entire year of -- of 2021, the -- there is not a huge amount of differentiation in the performance among the hotels. They're all -- many of them -- like most of them are down relatively the same amounts. And that's true even as we look out into Q3 and Q4. There are a few pockets of hotels that are down a little less but there is there's -- there's not in the case of our portfolio right now meaningful trends in markets that are doing better booking than -- than others. And that actually gives us a lot of confidence, because again going back to the -- the way I answered the question for -- for David is that our port -- our group portfolio and our group hotels -- there are hotels that do group -- primarily book, corporate group that's by far the largest segment. So we would not -- so the fact that we're not seeing much differentiation at among hotels, actually told us that's likely to be in fact true and consistent. And what we're seeing in terms of new leads and new bookings from that segment has also been relatively spread evenly through the portfolio. Obviously, not on a case-by-case basis, right? Which are looking at different hotels in the portfolio, but they -- but we are seeing kind of consistency to the portfolio, both in terms of where we are and in terms of where we think we're going.

I think that has a little bit to do too with when you think about the geography of our portfolio and the exposure that we have to certain markets that are probably not behaving too terribly differently from each other. If we owned significant group hotels in markets like New York, Chicago, some of the markets that you can think of that are probably going to be a little bit close -- going to take a little longer to get back to stabilization. I think you will see much more of a disparity in what we're seeing throughout the portfolio. So I think it has to do a lot with our exposure to, as we talked about some new locations, a lot of this kind of drives to these new locations and just have been a little bit more homogeneous within the portfolio.

Got it. That's helpful. And then just one more from me, on the capital allocation and capital deployment front. I think you said, you hoped to be in acquire as the cycle progresses. What's your latest thinking on maybe when you'll be able to put money to work? And then how are you thinking about the different sources of capital that are available to you today?

Yes. Sure. Obviously, we have a good amount of liquidity available to us today. As we did, kind of, throughout this pandemic, we're obviously looking at managing to various scenarios and various ways of how things stabilize and how quickly things stabilize. So I would say, that's our continuous immediate focus, obviously, that remains on the operations of our hotels getting to breakeven, hopefully getting cash flow positive as a company sooner rather than later. And clearly, we have been very active throughout various cycles, throughout our history, as you know very well. So it's something that we will absolutely look at. We'll be looking to be an active participant to the extent of the next up cycle provide some interesting acquisition opportunities. And I think that there are various levers we can pull to have the type of liquidity available to most of what needs to be an active buyer. And that being said, we highlighted this a little bit in my comments, there certainly don't appear to be a tremendous number of assets out there on the markets that are, A, very appealing great strategic fit; and B, would come at a price that we would view as discounted price, if you will. There just isn't that much of that kind of stuff out there. I think you've certainly through some of the rumors, potential deals that are currently out there, you're seeing this pricing for attractive hotels remains pretty aggressive, frankly. So I don't think there's any need for us to be overly jumpy as it relates to acquisitions. So I think we can sit back we can see what kind of comes our way, as we started building a pipeline coming out of this. But we feel really good about not having sat on our hands over the last couple years and really continue to transform the portfolio and have a portfolio now where there still are a lot of better growth opportunities within the assets that we've bought over the, say, three to four years.

Thank you very much.

The next question comes from Thomas Allen with Morgan Stanley. Please, go ahead.

Thanks. Just following up on the last question. How are you thinking about dispositions right now?

That's not similarly to how we've always treated dispositions, which is, we'll continue to look very closely or where we think the value for assets are versus where we think long-term growth potential is for a particular asset and we will continue to be very diligent in the way that we're evaluating both our existing properties within our portfolio and potential additions that are out there in the market. So that means particularly when there are some bigger CapEx needs coming up for some of our assets, we'll take a very close look and whether think that there's a good enough market out there to potentially sell an asset as opposed to making an additional investment if we don't feel like the right kind of ROI is available by doing that project. So, I would say, that we've obviously done a lot of heavy lifting in the way that we transformed our portfolio. And I see a lot of growth potential within our portfolio, even with some of those assets where we do think that we might be doing some CapEx projects over the next few years. So at this point, I'd say that it's a little bit more around the margin as we sit here today with some additional dispositions than we probably did.

All right. Thanks, Marcel. And then just your commentary around thinking through 2021 and the comments that you're kind of increasingly optimistic about getting to positive EBITDA or positive free cash flow by 3Q. It sounds a little bit more optimistic than peers where I feel like mostly committed to like the second half of 2021 improvement. Was that on purpose? Like is that -- do you feel like it's been your portfolio is better positioned to turn profitable before peers or other things that drive you that and might as well kind of come off more optimistic? Thank you.

Yes. Thanks, Thomas. It's a good question. To be frank with you, I don't think we kind of went through exactly what it appears we're saying. I mean our view is that we've got some momentum and traction on booking activity, so that's a positive. And then just looking at the portfolio as we pointed out the markets were very strong a lot of these Sunbelt markets seem to be doing better. So I think that's -- that performance and expectation that we have is relative to overseeing the business and are a mix of geographic locations. So that's really what's important. Marcel do you have anything to add on it?

Yes. I'll just add two and then I think Atish highlighted these various comments too. We certainly could foresee some woes coming up where we think we will have -- we will be breaking even where it may not be structurally yet as a little bit later in the year. So we saw that obviously in a month like October that was you know positive hotel EBITDA. So maybe a look at where we finished the quarter -- the fourth quarter where it's you know negative hotel EBITDA of less than $3 million for the 34 hotels in our state property portfolio. We're obviously not tremendously far off from getting to a point where we can envision a breakeven EBITDA at that level. So I do view some of the momentum that we have to the strategic point that lead us to believe that you know as we kind of enter the second half of the year there that we will have the opportunity to get to that level.

All right. Thank you.

The next question comes from Bryan Maher of B. Riley FBR. Please go ahead.

Good afternoon. Maybe for Marcel and then Barry. You guys have been at this for a long time and you know The Wall Street Journal wrote a piece I think was early December suggesting a permanent impairment of business travel to the tune of 20% or 30%. What are your thoughts on that? Is that a bit of a stretch? Do you think there's some truth to that? Do you think the Zoom environment is going to hedge business travel by some degree? Can you expand upon that?

Sure. I'll start it off and then I'll let Barry jump in because he's got even more experience than I do. And I think your question is really, so yes, the way we view it -- from my personal perspective, I think that sounds particularly excessive. I don't believe that there is much of a fundamental shift that we'll see in the business. Certainly, shorter-term there are some -- there are some challenges to overcome as far as people getting back out on the road. But I think a lot of that is being driven by way to see the offices in my environment improving, people getting back to the office, working together. And I think -- and I'll steal a little bit of Barry's thunder because I know it's something that we talked about a lot and that he brings up a lot is the fact that there's going to be no greater push for people discard traveling again besides when they see their competitor traveling and meeting customers and being out on the road again. So I do not believe that we're going to see a truly fundamental long-term shift. Now could there be situations where people are saying look I -- do I really want to take this trip because I might just get on the Zoom call with someone? I think there will be some of that. There is other things there will be a play too such as what is the long -- what are the long-term ramifications of maybe some more working from home environments versus going to an office? So that -- those that actually create more travel for people having to travel to their home offices, if they don't live in the place anymore where their job is really based. I think there is a lot of ins and outs and pluses and minuses that are just as you sit here today are truly kind of impossible to predict. But I'm not a believer that there's going to be just as a fundamental real negative shock to what business travel looks like over time.

Yes. Thank you.

The next question comes from Ari Klein with BMO Capital Markets. Please go ahead.

Thank you. You know, maybe on the CapEx front. Can you expand how you think about spending over the next few years? Have there been significant deferrals and are there a handful of potential ROI opportunities that you're looking at beyond the ones that you've highlighted for 2021?

Sure. Last year, we came into the year with a budget about $120 million and cut back to over the course of the year the ultimate spending of $69 million. We had always expected 2021 to be a little bit lighter year in terms of CapEx knowing how good to shape the portfolio was in. And really the projects that I mentioned were all things that would have been either executed or in the plan or deep into the planning stages in 2020 -- for 2021. One of the things -- when we are very rigorous and one of the great benefits of having our in-house project management team is how much do we put around our five-year planning process. We're constantly looking at the next five years what projects make sense what can we afford what are the returns going to be on those projects. And then as we went through that process this year, I think we were again, pretty pleased with what the portfolio was and not feeling as there was a lot of urgencies to spend to do a lot of projects in 2021. But there were projects that we thought have some substantial returns. We are this year as part of our overall planning and strategy going back and doing some deep dives on some of the assets we've had that have been in the portfolio for more extended period of time, and really looking at all the things that we can do to those assets. Is it from a physical perspective or from a brand and management perspective to considerably change those assets? So to the extent, we identify opportunities there. Those are things that were in some cases we have placed forward for them in the five-year plan in some cases we don't. But those are things that could provide and retriggered the plan. I think we've talked for quite a while kind of about a -- of a normalized run rate on the portfolio, and so that a little larger size. We've talked about a normalized run rate and CapEx around the $60 million level and have kind of tried to -- in our five-year plan balance to that. So when was last year was a little over that issue maybe a little bit under that. But we think that's the right dollars to keep the portfolio in really good shape and do the projects that we need to do to keep the properties both fresh from a guest perspective, but also as I mentioned make sure that we're spending dollars which we've always done a very good job of in terms of back of the house infrastructure building systems spending as well.

And one of the -- and not that, I want to necessarily put a rosy spin on anything related to the pandemic, because obviously there is -- all the negatives that came out of the pandemic and it's a big hole that the whole industry is trying to work its way out of. But one of the silver linings as it relates to the CapEx piece, particularly for us is that, it allowed us to almost falls a little bit again and to look very closely at our entire portfolio and say, where do we think the appropriate money is to be spent in the next few years. And that it really goes to the point of Barry was making as it relates to some of those assets that have been in the portfolio a little bit longer to see. Say, when do we want to do this? How deeply do we want to do some of these renovations? And, to do a lot of planning around some of those things. I'd also say that, the four assets that we sold universally, they were going to be requiring some pretty significant CapEx in the coming years. So there is actually a fair amount of CapEx that we're avoiding as a result of having sold those core assets as well.

Got it. Thanks for that. And then maybe just looking at your portfolio from the supply growth standpoint in your major markets, do you have any sense of how that may have changed pre and post-COVID?

Yes. Sure Ari. So you know the pre-COVID weighted supply for 2020 was 2.7%, and it was 3.6% for 2021. Post-COVID at year-end 2020 supply growth came in at about 1.6% and is at 3.2% for 2021. So a couple of reasons in our view on why that came down. One, selling the assets, we did help lower that a bit. Secondly, would be delays and -- like cancellations of projects. We would expect that the 2021 number will continue to come down during the course of the year and as projects continue to get pushed out and obviously not much is being added in a way of new supply for you know 2021-2022 and beyond at this date. So from a supply growth perspective, I think, we're likely in a much better position than we were a couple of years ago and we'll reap the benefits of that over the next several years. And it's a combination of really what's happened and how that's changed. You know the ability for projects to get done in terms of financing as well as our shifting of the portfolio to just better markets for growth through our transaction actually.

Thanks for the color.

You're welcome.

The next question comes from Austin Wurschmidt with KeyBanc. Please go ahead.

Hi. Good afternoon, everybody. So Marcel, you've referenced the Sunbelt exposure, you know, is really an outcome of the dispositions you've done and -- you highlighted that some of these markets are going to ramp quicker than the overall portfolio. And so when you kind of overlay the market view you know with the -- the first pillar -- the transaction-oriented mindset, particularly, the diversification piece. How does that affect your view on -- on how you allocate you know the next you know next dollars either on the CapEx side or acquisitions for that matter moving forward versus sort of broad -- broadening your -- your geographic exposure?

Yes. Great question, Austin. And obviously we -- we continue to say and we're a firm believer as long-term as we will primarily be investing in, you know, top 25 US lodging markets key leader destinations. And, you know, an outgrowth of what our strategy has been over the -- over the past few years has been exactly what type of exposure that we currently have in the portfolio. We think that as we've always done we're -- we always have a very open mind to potential acquisitions and -- and I've always wanted to cast a little bit wider lens than particularly what you saw a few years ago from a lot of our peers, which was a little bit -- narrower focus on -- on the smaller set of markets which was to us also provided a much smaller set of acquisition obviously. So -- so we're going to continue to kind of have this wider lens and continue to look at a lot of different markets. We like the characteristics of a lot of other markets that we're concentrated in because of the things I mentioned in the long-term demand characteristics. Certainly a little bit more of a benign expense environment. So I think that's - that's where our primary focus will remain. That doesn't mean that's -- that it will come a time where you say look there are just these great acquisition opportunities because it's -- it's obviously going to be driven by -- by the supply of potential deals are out there. What happens with pricing and -- we think that there is just a great return to be made on a market where we currently don't have a lot of exposure and we're not going to shy away from that so. So it's really a long-winded way of saying look we're going to be -- we're going to be opportunistic. We're going to keep an eye really on the same kind of characteristics that we've always liked which is not an over-reliance on one particular demand segment having a good level of leisure exposure in our portfolio and -- and just look at where the opportunities will come our way.

I appreciate that. And then just -- there's been a lot hit on the group side, but I'm just curious as these groups rebook and others, sort of, look to get you know bookings on the calendar. Any change in -- in the F&B side and level of spend or types of items that are willing to spend on today? And then I'd also be curious you know specifically on the Hyatt Regency Portland, if you could give an idea of what the group bookings do or even the convention calendar look like in that market just given some of the challenges it's facing?

Sure. Let me -- let me talk about food and beverage group spend. So it's interesting what -- where groups are meeting today, we're seeing very good food-beverage contributions, but the hotels are having to work differently to figure out how to deliver that, right? So you know it's the question of are -- is the group and is the hotel and it varies you know willing to do a buffet which, obviously is lower cost more efficient versus doing something plated. We continue to see a lot of groups, particularly if it's not their big meal, doing, wanting more box lunches and things like that. So, it's been -- it's been a little bit different certainly depending on the market you're seeing. Some groups are doing that might have done cocktail parties are not doing those where they do before. So, it's going to be a slow comeback, I think to get back to the good food and beverage spend that we've seen historically. And again, that does vary a lot market by market, right? I mean, in California other than one of our hotels we're still not able to do indoor dining. So, that obviously has a big impact on what we're able to offer a group and how we're able to offer it.

Got it. And then, just as it relates to the -- the Hyatt Regency Portland. If you can give an idea of what, the group calendar and the convention calendar looks like for that market? I appreciate it.

Yes. So the market as a whole, the overall market when you look at city lights and -- which we are -- we'll be the most likely beneficiary of those. In the back half of the year, the numbers are significantly greater in terms of definite events on the books than they ever had it. So, we're keeping a very careful eye on those and when those show up and making sure that those are actually good piece of business for us. The very first time that kind of changes. So I mentioned the entire back half, and really every month to back half, you start seeing some real transition into that starting in June. So when we talk about having an eye to reopening the hotel in Q2, that's really what we're focused on. Right now, the number of citywide -- there were some citywide on the books for the first quarter and early second quarter that kind of went away on us so that's why we're keeping a careful eye on it. But it's part of what gives us again, a lot of long-term confidence in the hotel and certainly, in the market as a whole, we still think what we need is a great convention alternative for Pacific Northwest business and giving Seattle a real run for its money now that it has a dedicated convention center hotel in Portland. But also we think from the entire West Coast, in California in particular, Portland can serve as in much lower-cost alternative for those groups to California-driven convention and you have a terrific airport in Portland continues rank on one of the best airports in the country with a significant Alaska Airline hub. And as Alaska has extended its reach beyond their traditional West Coast to a lot more East Coast destinations that opens up a lot of opportunities for a larger city like Portland.

Great. Appreciate it. Thank you.

The next question comes from Tyler Bator with Janney Capital Markets. Please go ahead.

Hi, good afternoon. This is Jonathan on for Tyler. Thanks for fitting us in. One quick one on international demand. Do you have any sense as to when that demand will return and how much of a headwind is that for markets that are more tilted toward international?

We're pretty fortunate. We have, I mean, we have a very low percentage of international travel in our portfolio overall, given that we are had relatively low exposure to major gateway cities. We have seen significant international business at our Western Oaks and Gallery in Houston but the South American and Central American travelers are traveling. And when they do travel, Houston, in general, and the Galleria Mall, in particular, is a shopping destination is a very tricky decision. We've done quite well there. Our other hotels that traditionally had a fairly large component of international businesses are near San Francisco airport and we are starting to see international flights, international crew business come back and that's probably the best indication of when -- and if you're curious when the business will come back, we're keeping a very careful eye on the international flights, international crew business, in particular at that hotel as a marker for when international -- the international traveler will be making inbound business.

Okay. I appreciate all the details. That's all for me. Thank you.

This concludes our question-and-answer session. I would like to turn the conference back over to Marcel Verbaas for any closing remarks.

Thanks, Andrew. Thanks -- thanks for the -- thank you, everyone, again for joining us on our call today. Now we are at the end of earning season, so I appreciate everyone's attention and insightful questions. Certainly, there's some light at the end of the tunnel with vaccinations increasing and business appears to be slowly rebuilding, particularly on the leisure side, obviously. And we look forward to updating you again in the quarters ahead. So, thanks again for joining us today.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.