Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Sunstone Hotel Investor's Third Quarter Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be given at that time. I would like to remind everyone that this conference is being recorded today, November 7, 2025, at 11 a.m. Eastern Time. I will now turn the presentation over to Mr. Aaron Reyes, Chief Financial Officer. Please go ahead, sir.

Thank you, Operator. Before we begin, I would like to remind everyone that this call contains forward-looking statements that are subject to risks and uncertainties, including those described in our filings with the SEC, which could cause actual results to differ materially from those projected. We caution you to consider these factors in evaluating our forward-looking statements. We also note that the commentary on this call will contain non-GAAP financial information, including AdjustedEBIT.RE, Adjusted FFO, and Hotel AdjustedEBIT.RE. We are providing this information as a supplement to information prepared in accordance with generally accepted. Additional details on our quarterly results have been provided in our earnings release and supplemental, which are available in the Investor Relations section. With us on the call today are Brian Giglia, Chief Executive Officer, and Robert Springer, President and Chief Investment Officer. After our remarks, the team will be available to answer your questions. With that, I would like to turn the call over to Brian.

Thank you, Aaron, and good morning, everyone. Operating results in the third quarter reflected many of the same trends we saw earlier in the year with continued strength in San Francisco, helping to offset a more price-sensitive leisure traveler and subdued government-related demand across other parts of the portfolio. Despite these cross-currents and disruption from the fire near our Four Seasons Resort in Napa Valley, our earnings for the quarter were in line with our expectations as stronger ancillary spend and better cost controls offset softer room revenue growth. at our urban hotels. RevPar growth was generally flat during the quarter, with our Marriott Long Beach downtown continuing to deliver outsized growth following our brand conversion last year, which helped to balance a tougher comparison at our JW Marriott New Orleans. As we have noted previously, the New Orleans market was expected to experience some very tough comps after the first quarter, and so while third quarter REVPAR at our hotel declined from last year, the performance was better than expected as the hotel continued to gain market share. Despite effectively flat REVPAR at our urban hotels, we managed to deliver 140 basis points of margin growth as our operators were able to effectively control costs. In fact, Marriott Boston Long Wharf delivered a 47% EBITDA margin in the quarter, an increase of over 100 basis points relative to the prior year, a very solid performance for an urban, full-service hotel, especially considering recent cost pressures. Our convention hotels turned in better-than-expected performance with REVPAR growth of 3.5% on generally healthy trends in group business. San Francisco was once again a standout performer with more than 15% REVPAR growth, and we continue to be encouraged by how the market and our hotel are setting up for additional growth into next year. In Washington, D.C., performance across the market continued to be hampered by weaker government and government-related demand, although results at our recently converted Westin were consistent with our most recent expectations. In San Antonio, we were renovating our meeting space during the quarter, which caused some disruption, but that work is now complete and should position us for growth in 2026. Across the portfolio, we had solid production in the third quarter, booking 6% more rooms than the prior year and posting our strongest third quarter booking volume since prior to the pandemic. We have positive group pace as we head into 2026 with particular strength in Orlando, Boston, Miami, San Francisco, and wine country. Performance across our resort portfolio was softer than expected as a weaker demand environment in South Florida and the Keys added to what has been a more challenging market this year in Maui. I think we are beginning to round the corner in Maui as September marked the first month of positive red part growth for our resort this year, and October is also positive and slightly better than expected. In wine country, we continue to be encouraged by a better demand backdrop this year. Although Q3 was expected to be our toughest comp quarter of the year, and we also experienced headwinds at the four seasons from the Pickett Fire in Napa County in late August and early September. While the fire was not close enough to cause any physical damage to the resort, we did experience cancellations and overall lower business volumes in the weeks after. At Onda's Miami Beach, overall profitability in the third quarter was consistent with the range we shared with you last quarter we continue to see an acceleration in our booking patterns and are pacing well to deliver strong growth next year occupancy continues to build and we are well positioned with meaningful group bookings in the first quarter of 2026 the most important quarter for profitability robert will share some additional details on our progress at the resort shortly While the operating environment remains choppy and additional uncertainty has been introduced from the government shutdown, based on what we see today, we are maintaining our outlook for the year and are continuing to work with our operators to drive incremental revenue and control costs. We are working through our budgeting for 2026, and while that process is just beginning, we see reasons to be optimistic that we will benefit from our recent investments and be able to deliver above market growth next year. We will have more details to share with you on our next call.

And with that, I'd like to turn the call over to Robert to give some additional details on our progress in Miami and our capital investment activity. thanks brian it's been a productive few months for us on the operations and investment front we continue to make headway at on does miami beach guest response and lead volume at the renovated resort continues to be positive the resort is currently number eight on trip advisor for miami beach hotels a significant improvement over where we were 90 days ago as we shared with you last quarter we need to book approximately 1 000 transient room nights per week in order to achieve our desired occupancy goals. I'm happy to report that we have recently been pacing ahead of that number as we continue to build momentum post-opening. We are pleased with our business on the books for early 2026, which should support a solid first quarter of next year. Additionally, a constructive event calendar next year, including the College Football National Championship in January and the World Cup in the middle part of the year, should help add further compression. While we got off to a choppy start this year, we look forward to meaningful earnings growth next year and into 2027. On the capital front, we completed a renovation of the meeting space in San Antonio on schedule and on budget. This investment should allow the hotel to better sell group business, and we will begin to see the benefits of that next year. In San Diego, we are just about to begin a renovation of the meeting space at our Hilton Bay front. This hotel is consistently ranked as the top-performing large group hotel in the market, and a refresh of the meeting space will ensure it is able to maintain its competitive positioning. We will complete this work in phases to minimize disruption. Separate from these projects, we are continuing to work through the planning and budgeting process for our capital investments for next year, and we'll have more to share with you next quarter. The transaction market continues to be quiet although we are seeing some incremental signs of life. While the debt financing markets remain open and conducive to transaction activity, a more tepid buy side has left some would-be sellers opting to refinance. Despite this more subdued backdrop, we continue to seek out opportunities where we can drive growth and create value through a creative transaction activity. With that, I'll turn it over to Aaron. Please go ahead.

As we noted at the top of the Even with the disruption we experienced at Forge created a 50 basis point draft and a $1 million headwind to earnings. Stronger ancillary spend and ongoing efforts to contain costs helped to mitigate margin pressure. The third quarter REVPAR increased 2% compared to last year, and total REVPAR grew 2.4%. Adjusted EBITDA.RE in the third quarter was $50 million, and adjusted FFO was $0.17 per diluted share. We have been working with our operators to reduce costs wherever possible, and are seeing the benefits of this in our results. Through the first nine months of the year, our comparable portfolio total REVPAR growth has been 2.3%, and we have been able to hold margins to within 20 basis points of where they were in the prior year. This means that we have been able to contain our expense growth more effectively than expected. We continue to benefit from a strong balance sheet, with net leverage of only 3.5 times trailing earnings, or 4.8 times, including our preferred equity. As of the end of the quarter, we had nearly $200 million of total cash and cash equivalents, including our restricted cash, together with full capacity available on our credit facility. This equates to $700 million of total. As previously disclosed, we completed an amendment and restatement of our bank debt in the third quarter, which extended our average maturity by three years and lowered our overall borrowing. We will be utilizing a portion of the proceeds from one of our newly amended term loans on a delayed draw basis to repay our Series A senior notes at their scheduled maturity in January 2026, after which we will not have any debt maturities until 2028. We have a very strong bank group, and we appreciate their ongoing support and partnership. While the operating environment remains challenging and the government shutdown has added to already heightened uncertainty we are maintaining our full year earnings outlook based on what we see today we expect this will help make up for more moderate rooms rev par growth that is likely to be in the lower half of our existing range and allow us to generate EBITDA and FFO that is at or near the midpoint note that this reflects actual activity so far in the corner and current trends as we sit today but these estimates could be negatively impacted if the government shutdown or its lingering effects cause additional disruption to travel. The fourth quarter is projected to be our strongest RevPar growth quarter of the year, with total portfolio of RevPar growth expected to be in the mid-single-digit range, with Andaz Miami Beach contributing $400 to $500. As a point of reference, our prior year fourth-including and excluding on does was 201 dollars and 209 dollars respect prior full year it was 217 dollars and 220. now shifting to our return of capital we have repurchased a modest amount and our current year-to-date total stands at 11.4 million shares at an average price of eight dollars and 83 cents per share for a total deployment of 101 million dollars this repurchase activity has been accretive to both NAV and earnings. While we retain capacity for additional share repurchases, our projections do not assume the benefit of additional buyback from our share repurchases. Our Board of Directors has authorized a $0.09 per share common dividend for the fourth quarter, and has also declared the routine distributions for our Series G, H, and R. Before we conclude our prepared remarks, I'd like to turn it back over to Brian to share some additional thoughts.

Thanks, Aaron. We will open it to questions shortly, but first, I want to address investor feedback related to the letter Tarsadia sent to our board and recent market speculation and misconceptions. While as a matter of policy, we do not comment on rumors, we also believe in corporate transparency and healthy dialogue with our shareholders. In March 2022, upon my appointment as CEO, the board provided a straightforward mandate, close the valuation discount, improve absolute and relative total shareholder returns, and drive growth in NAV per share. It was my view that generating superior returns from the ownership of hotel and resort real estate requires more purposeful asset recycling in order to capture the value created through capital investment, repositioning, and asset management before it is eroded by an extended hold period and incremental defensive capital spend. I still believe this to be true. That said, the last few years have been a challenging time for lodging transactions and our pace has been slower than what we would have liked. However, even despite a depressed transaction market, we were still one of the most active in the space, disposing of lower quality, lower growth assets and using proceeds to acquire better real estate, including the remaining interest in one of the premier group hotels in San Diego, prime beachfront land in Miami with meaningful long-term growth potential, and a solid hotel in San Antonio with a fantastic location and an attractive yield. In total, we sold over $600 million of assets and acquired roughly $600 million of assets and recycled more capital than our peers on a relative basis. In addition, we have repurchased nearly $300 million of stock, or 14% of our outstanding shares at a significant discount to NAV, generating meaningful value for our shareholders. During this time period, we remain nimble, allowing us to take advantage of market conditions and effectively allocating capital through dispositions, acquisitions, investment in our portfolio, and share repurchases. Despite these accretive allocations of capital, the last several years have been a challenging time for the lodging REIT sector, and the group's total return performance has been disappointing. The board and management remain committed to taking every step possible to maximize value for shareholders and are open to any alternative that would reasonably be expected to result in value creation. Which is why we have, from time to time, formally engaged with parties who have expressed an interest in acquiring subsets of our portfolio or the entire company. This is evidenced by what was speculated in the press last year, but despite management and the board going to great lengths to work with one of those parties to accommodate a sale of the company, they were not able to raise the equity capital needed to complete a transaction, and so there was no deal to do in the end, and contrary to what you may have read, no offer to accept or reject. It seems almost an obligatory response in the face of rumored deal speculation to default to assumptions of management and board entrenchment. I would encourage you to consider the facts I have shared with you. The actions we have taken in the years since my appointment as CEO have been consistent with preserving full strategic optionality and prioritizing the interests of shareholders. We have been deliberate in the construction of an exceptional portfolio, encumbrance-free balance sheet, and shareholder-friendly governance. We have not done anything that would diminish the value or likelihood of realizing the company's value through a potential sale and, in fact, have done the opposite and endeavored to engage in conversations related to a transaction when the board believed they had an opportunity to better realize value for shareholders. Where does that leave us today? We continue to execute our strategy and are working to recycle more assets. The transaction market remains depressed and equity capital, especially for larger deals, remains tight. We regularly meet with financial and other advisors to discuss market conditions and potential alternatives available to the company. Our directors, most of whom have significant transactional experience, an important attribute that was considered as part of their election to the board, provide management with guidance and support on evaluating and executing transactions to maximize value to shareholders. As we have done in the past, the board has and will continue to engage with credible and capitalized counterparties for the company. We have a great portfolio with meaningful embedded growth, and we have a well-informed and realistic view of the market and the value of our portfolio today and what we expect it to be in the future. At the same time, we also understand a lack of depth and liquidity in the current transaction environment. We are also well aware that market conditions can change quickly, so we will remain nimble and ready to pursue any alternative that will create value for our shareholders. As evidenced by our excellent governance ratings, we take the fiduciary responsibility that we have been entrusted with seriously and are committed to finding the most expedited path to realizing the value of our portfolio. And with that, we can now open the call to questions. Operator, please go ahead.

Thank you. We will now begin the question-and-answer session. If you would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. And if you would like to withdraw your question, again, press star one. We also ask that you limit yourself to one question and one follow-up. For any additional questions, please recue. Your first question comes from the line of Duane Fenningworth with Evercore ISI. Please go ahead.

Yeah. Hi, this is Peter on for Duane. Thanks for taking the question. Could you just go back to your thoughts on 4Q for us real quickly and tease that out, the mid-single-digit total REVCAR range, how has that changed over the last 90 days? And it would be helpful to maybe hear your thoughts on if we separate out Miami and San Diego, what's embedded for the rest of the portfolio?

Sure, Peter. Thanks for the question. This is Aaron. I'll take a first pass at that. So Q4, even from the start of the year, was always expected to be our strongest quarter from As you noted, we expected top-line to grow in the mid-single-digit range, and the underlying drivers are really obviously a meaningful contribution from on-dust Miami Beach, which has noted at the midpoint accounts for about 450 basis points of the growth. But the growth is really broad-based, so we're seeing strong performance in wine country. As Brian noted in the prepared remarks, YLA is starting to turn a corner and be a contributor there, and then we'll see some contribution from Bayfront as well, given the lapping of the labor activity from last year, which is helping to balance out what we expected to be some softer growth markets all along in New Orleans, just given the calendar and the activity that happened last year, and then D.C., just given some of the headwinds from the current environment that we're seeing now. So all in, when you take that together, where we're focused, as we noted, on the midpoint of our EBITDA and FFO range, which would result in, you know, about EBITDA in the low $50 million area.

Got it. Thank you, Aaron. And then, Brian, thank you for the extensive detail about, you know, the transaction markets. And question for you or for Robert would be just, you know, how do you think that changes in 2026? What could be the catalyst from here? And in case there are further dispositions within the portfolio? Do you see opportunities on the acquisition side?

Yeah. I mean, look, I think when we look at compared to last quarter as going back a quarter before that, I think the transaction market continues to slightly improve. I think that we have started to see maybe a little bit more rationalization in pricing. and, you know, it's still not robust and it's not, you know, especially not for larger assets. And so, as we look into 26, you know, I think that the expectation is that things will continue to improve. The debt markets are absolutely there and supportive of deals of all sizes. Obviously, more for cash-flowing assets, it makes it easier to get the debt amounts for that. But I think really, you know, when you look at the outlook for 26 right now, it's not overly inspiring. And I think what, you know, we'll need to move things forward will be, you know, a slightly more positive outlook or additional adjustment in pricing expectations to be able to account for what will be a modest growth year.

Got it.

Your next question comes from the line of Cooper Clark with Wells Fargo. Please go ahead.

Great. Thank you for taking the question.

I guess just sort of sticking on the transaction market front, I'm just curious if you're seeing any large buyers willing to acquire and scale and if it's a bid-ask spread issue or there just isn't capital demand for the sector and if there is any disposition pipeline you could speak to either on a single asset or a larger piece of your portfolio all right on the on the disposition front i mean we have you know despite a more challenging transaction market we have and will continue to to look to recycle assets you know we have especially for our size we've been extremely active over the last few years and been able to exit hotels where we thought the growth was lower or there was capital that was was needed it and those transactions were done at attractive cap rates and have been able to redeploy that into various different sources, including Beachfront in Miami, which we had a major repositioning, a more stable but still fantastic located asset in San Antonio, and then being able to pivot very quickly to repurchase shares, which we have over the last several years of over 14% of our float. So we will look to continue to do that. It works. The current market is more supportive of assets on the smaller side. I think when you get into scale above a couple hundred million dollars, I think the buyer pool is more limited. And I think really what will change that is as the forward outlook improves at whatever point that is, as we have seen over time, you'll see capital quickly come back into the space.

Great. Thank you. And then I guess just switching over to the Andaz, just curious, any thoughts about how we should be thinking about the EBITDA ramp into 26? Do you think that lower end of 12 to 16 million is achievable next year with, you know, stabilization in 27 and the high teens to low 20 range?

Yeah, I think the next year outlook is definitely achievable within that range. Q3 ended where we were expecting it to. Q4 is ramping up well, and we're, you know, getting to that December, you know high 60s 70 percent occupancy our transient bookings have accelerated and you know we talked about last call that we needed you know roughly a thousand transient rooms booked a week and we are you know right around that in several weeks well above that the market while the market has softened a little bit are the rate in the market and the rate for our comp set is still well above where we under wrote and we are seeing very strong bookings going into 2026 mainly q1 and the city has a good setup for next year national championship game fifa f1 so not only do we have a a ramping resort we have good business on the books in q1 and we have a strong market, and remember that Q1 makes up a large portion of the profitability for the entire Great.

Appreciate the color.

Your next question comes from the line of Smedes Rose with Citi. Please go ahead.

Brian, you mentioned in your opening remarks some group strength. You kind of called out four markets there. I'm just wondering, can you talk about just overall pace for groups that you're seeing for your portfolio for 26, and I guess, you know, what percent of rooms are sort of on the books at this point for next year?

Yeah, we'll cross over the year at roughly right around 80% of the room nights on the books, which is relatively, basically consistent with the prior year, too. So crossover, we're on track there. We've seen, especially in Q3, we saw really good group production. Now, that is for current year 26, 27, 28. We've actually seen a lot of corporate demand going into 27 and 28, and that tells us they're trying to secure the prime dates at this point. When we look at pace, overall pace is up low, mid-single digit for next year. The hotels and resorts that are strongest for us, Andaz, San Francisco, the Bay Area, and wide country all have very strong pace for next year. Orlando has had a phenomenal booking quarter in the third quarter has very strong pace as the long wharf which is a hotel that we about you know two years ago started it always been a wonderful transient hotel but started to be more strategic and where we are placing group business which has allowed us to to not only grow occupancy on shoulder periods but also compress transient rate during that time during periods where we have we place group and then also with San Antonio next year you you have a market market is a little stronger and we're coming off of renovation of the meeting space which was completed in Q3 your Our next question comes from the line of Michael Bellisaro with Baird.

Please go ahead.

Good morning, guys. Brian, thanks for all those comments at the end. I thought it was helpful. First question, just you guys didn't buy back much stock in the quarter. One, why was that? And were you restricted at all that would have precluded you from repurchasing stock?

We were not restricted at all. And, you know, we try to, you know, when we look at a share repurchase, we look to match fund a lot. So sometimes it depends on when we have transactions happening. Now when we sold New Orleans, we did acquire more. And so there is a piece of it that is more price sensitive. And when we believe that we have an adequate discount to NAV, that is always a good capital allocation. option for us. We also weigh liquidity and other factors. And so, you know, if you've looked over the last few years, you've seen some sort of, you know, you'll see ups and downs in the velocity and volume of repurchase. But I think it's been, over that time period, generally pretty consistent and, you know, a 14% of our overall flow. So quarter to quarter, it's going to vary.

But I think we um you know as far as as having it as a allocation tool it's been one that we've used consistently understood thanks and then just switching gears uh can we dig into why lay a little bit more about what you saw performance wise september october how those actualized versus expectations and then what you're seeing in terms of pace into year and especially for the holiday period. That would be helpful. Thank you.

So, as we talked on the last call, we, because of our positioning in the market, we knew that we were going to lag Conapoli and lag some of the luxury in Waialea also. So, a good sign, and I think we've heard it in other company peer reports, is that there's been great growth in kind of poly. And we believe kind of poly is, is just about stabilizing it, you know, in the 60s to 70% occupancy. So that's a very positive sign for us. And some of the luxury in, in Wailea, although some of it was, is comping off a displacement is also doing, is also improving. And, and we saw that in starting in September and into October where our rev parts are positive. So, So, you know, as the market grew, we were now able to grow back into our place. And so our index, you know, over that time period has also improved from mid-90s REVPAR index to it should be stabilized around 110. We're working our way back up there and into the low 100s now. We had a great group booking, or we had very strong group bookings in the quarter. Our Q4 group is very solid and up significantly. And, you know, when we look into the festive time period, our revenue is in line with prior year. So, you know, I think everything that we were hoping to see, we have seen and we're continuing to see now. And so, as we look into next year, you know, we'll get the full advantage of our newly renovated product. We're having great booking trends right now, and we will continue to regain our transient share.

Hopeful. Thank you.

Your next question comes from the line of Chris Warronka with Deutsche Bank. Please go ahead.

Hey, good morning, guys. Thanks for taking my questions. So, you know, I think, Brian, again, helpful commentary at the end there. I had a question on why later, so not really talking about, you know, selling the company, but I think there's always been a perspective that there's a big value-add opportunity at that asset, and i i confident you guys have looked at all the options many times over but can you maybe just give us an update on you know what what what what is what your current perspective there is in terms of what uh you know what value might might be extracted longer term yeah i mean our our perspective is that waialeah is a premier if not the premier you know luxury beachfront resort in

the U.S. I mean that's it's a phenomenal location it's it is a irreplaceable stretch of beach you know it is has the Maui market you know taking some time to recover a little bit yes and but we're seeing all the positive signs and seeing groups and leisure travelers come back to that market. So long term, it's phenomenal. You know, we have talked over time about having some additional future development opportunities there. One thing about beachfront resorts is that development takes a while. And so while the market has had its, you know, has had a little bit of an up and down time period right now, we still work through, you know, that process and are, you know, far along in it, but still have a ways to go to be able to secure the ability to add additional keys to the resort. Our belief is by the time we finish that, which is probably another, you know, year plus, the market will be where it needs to be, and then we'll be able to evaluate the returns on that. So a little far out, the important thing is that we have a phenomenal piece of land in an irreplaceable market, and we will have the ability at some point in the future to add to that if it makes sense, and we'll address that and talk returns in that once we get to that point. But we're working on it, and we're well along in the process, and we're still a ways to go, though.

Okay. Okay, fair enough. Thanks for all the color, Brian. Just a quick follow-up on Orlando, on the renaissance, and I understand you said next year there's a lot of positive momentum there. Can you just remind us when the, you know, franchise or management contract is up there and, you know, whether you have thought about, you know, making changes when that happens?

It's subject to a long-term agreement with Marriott. You know, we've had other hotels that are subject to long-term agreements with Marriott. And when we can figure out something that works for both of us, it won't keep us from re-evaluating brands as we've done in Long Beach and D.C. We're really excited about the pace going into next year and the bookings that the hotel has been able to do. And we'll evaluate any opportunities, whether it be through a renovation or any repositioning in the future. But right now, we're really excited about what's on the books for next year.

Okay. Very good. Thanks, Brian.

Your next question comes from the line of Dan Pulitzer with J.P. Morgan. Please go ahead.

Hey, good afternoon, everyone. Thanks for getting my question. First, it sounds like, you know, there's a lot of the CapEx stuff has been winding down, but there's still a good amount going on. Is there any way kind of broad strokes just to better frame how we should be thinking about CapEx, you know, on a go-forward basis in the coming years?

You know, I think as we get into next year, it's definitely going to tail off from the heightened amount this year. You know, that said, we'll always have, you know, some form of a, you know, cyclical rooms renovation, meeting space renovation, you know, at various, you know, usually one or two hotels throughout the portfolio. You know, as far as our bigger hotels go, we don't have any of that next year. But, you know, as we get into, you know, we're doing meeting space in San Diego that's starting in the fourth quarter. That will go into the first quarter a little bit. But we're kind of strategic in how we're layering that and placing it. So, you know, I would expect it to normalize a bit down, and then, you know, depending on in out years what hotel is coming up for renovation, it may, you know, it will adjust accordingly. So, you know, I think going forward somewhere in the, you know, 80-ish range is the standard, you know, amount that accounts for, you know, these cyclical renovations.

Got it. That's helpful. And then just in terms of the remarks, which were helpful in addressing some of those concerns that are out there, I think you noted that you would pursue any alternative that could create value for shareholders, which is obviously the right thing to say. But I don't know, are there options that, you know, that you view as most viable versus any that are complete non-starters or off the table?

No, I don't think, you know, I think when the board evaluates these options and when you look at the space and, you know, given the the persistent discounts to NAB that that lodging reads trade at you know any board Sunstone or other would would not really be whole upholding their fiduciary duty if they weren't considering options to somehow realize a value at or close to NPD. And so I think because of that, it's a, you know, and maybe it's just a little bit more specific to this space, but it's, it really is like, it's just an ongoing process that's good governance. It's, you know, that on a, it's not really even on an episodic basis. It's on a quarterly basis for, or at least our board, you know, works with our advisors to understand value to understand liquidity in the market and you know will then use that to evaluate what what is available now what transactions are available today and what is our expectation for future value and and that's the basis to decide how to realize value for shareholders understood thank you your next question comes from the line of kenneth fillingsley with compass point please go ahead hey good morning

good morning i wanted to ask about the you made a couple comments about ancillary spending being stronger um and looking at the the other line item for revenue that was a pretty strong and so So my question is, what are you including in there? What is the increase and is the expense – are you able to control the expenses on that better where a lot of that flows to the bottom line?

I'll address that. So certainly we have seen as the year has went on that our out-of-room revenue growth has outpaced that that we've derived from revenues. And that has just been part and parcel with just the strength that we've seen in the group business, whether it's banquets, A, B, F, and B, has come in stronger from a total revenue REVPAR growth perspective, a bit of the softness that we saw. That's been good to see. We anticipate for a full year basis that total REVPAR actually exceeds REVPAR growth by 50 to 75 basis points, so good solid trend there. And then on the other income line, that'll grab all of our, whether it is destination and resort fees, our spa, our parking, et cetera, that'll all come in there, which, you know, has just been a source of strength this year, particularly as we've seen, you know, better growth in our luxury resorts in the wine country.

And it really speaks to the strength that we've seen when you look at the different group components. The corporate group for us, which is a lot of what our hotels will cater to, remains strong and the outer room spend continues to pace at levels up to last year and significantly after 2019 and so when you look at the composition of our group our group you know less government less association those tend to be a little bit more price sensitive and we continue to see strong performance from the corporate group.

And then the other question I had is GNA as a percent of revenues, it was lower as a percentage. Anything particular in the quarter? Is this something to extrapolate going forward?

Yeah, GNA for the quarter, it did get a bit lumpy as you look at it just among the four quarters of the year. But from a full year perspective, our guidance is 20 to 21 million. That's a bit higher than where we were year just based on where some you know comp formulas came out for 2024. But if you look back and compare that to where and it's affected where we were at 2019 so from a from a long-term growth perspective you know that feels pretty darn good to us given you know what we all know of inflationary pressures over the last few years.

Okay thank you.

And that concludes our question and answer session. I will now turn the conference back over to Brian Julia for closing comments.

Thank you everyone for the interest in the company and we look forward to meeting with many of you at upcoming conferences.

Thank you.