Hersha Hospitality Trust (NYSE:HT) Q3 2019 Earnings Conference Call - Final Transcript

Nov 06, 2019 • 09:00 am ET


Hersha Hospitality Trust (NYSE:HT) Q3 2019 Earnings Conference Call - Final Transcript


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Good day, and welcome to the Hersha Hospitality Third Quarter 2019 Conference Call and Webcast. [Operator Instructions]

I would now like to turn the conference call over to Mr. Greg Costa, Manager of Investor Relations. Sir, the floor is yours.

Greg Costa

Thank you, Mike. And good morning to everyone joining us today. Welcome to the Hersha Hospitality Trust third quarter 2019 conference call. Today's call will be based on the third quarter of 2019 earnings release, which was distributed yesterday afternoon. Prior to proceeding, I'd like to remind everyone that today's conference call may contain forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and other factors that may cause the company's actual results, performance or financial positions to be considerably different from any future results, performance or financial positions. These factors are detailed within the company's press release as well as within the company's filings with the SEC.

With that, it is now my pleasure to turn the call over to Mr. Neil H. Shah, Hersha Hospitality Trust's President and Chief Operating Officer. Neil, you may begin.

Neil H. Shah

Good morning, and thank you for joining us on today's call. Joining me this morning are Jay H. Shah, our Chief Executive Officer; and Ashish Parikh, our Chief Financial Officer.

Forecasts for 2019 global GDP growth continue to drift lower and this deceleration has spilled over into the US, as trade tensions and political uncertainty have resulted in a significant impact on corporate and consumer confidence, leading us to remain cautious in our near-term outlook for the lodging industry.

Last quarter, we anticipated the third quarter to be challenging in many of our markets, particularly in July and August, and we brought down our forecasts meaningfully to reflect this outlook. We remain constructive on September, but corporate travel did not rebound. Weakness in international demand persisted and Hurricane Dorian had a meaningful impact on demand and margins in South Florida. Star's top 25 markets recorded negative to flat RevPAR for the quarter. Of our six markets, only the Washington DC track showed positive RevPAR for the quarter.

2019 has been a challenging year for major urban gateway markets. Year-to-date, we have gained 290 basis points of market share, but baseline market performance has been flat to negative in our markets. We are confident that these markets will rebound in the coming years and our portfolio of segment-leading hotels will achieve our targets. In 2020, the majority of our markets have stronger convention and event calendars, most notably South Florida is expected to be the nation's leading market in 2020.

That said, for 2019, we are forecasting softer fundamentals for the rest of the year based on the September trend and early observations from October in our markets. We have taken a fresh approach to our near-term operating and capital allocation strategies and we will outline a few of these initiatives this morning.

Throughout the year, we have been highlighting the three company specific catalysts to drive our performance versus our markets.