CorePoint Lodging Inc. (NYSE:CPLG) Q3 2019 Earnings Conference Call - Final Transcript
Nov 13, 2019 • 05:00 pm ET
Keith A. Cline
loss in market share.
The problems continue to the third quarter and contributed to our RevPAR weakness. After reporting a 6.1% decline in comparable RevPAR in Q2, we had a 6.3% comparable decline in Q3 with 542 basis point decline in market share. The RevPAR decline was due to a 2.7% decrease in ADR and 253 basis point decrease in occupancy. When looking at results by various buckets within the portfolio, RevPAR for our non-reposition, non-oil and non-hurricane portfolio, which represents 63% of our comparable hotels, was down 5.7% versus the third quarter last year. The balance of our portfolio, which included reposition oil and hurricane impacted assets, saw RevPAR, down 7.2%.
Adjusted EBITDA ROE for the third quarter of 2019 was $38 million, due to continuing revenue declines the softening of the broader macro lodging environment, our revised outlook for the fourth quarter, and taking into consideration the effect of asset sales and the impact of Hurricane Dorian, we are adjusting our full year outlook. Dan will go over that in a moment.
Now I'd like to briefly update everyone on the resolution of our management dispute with Wyndham. We are pleased to have reached a settlement in mid-October that we believe begins to address the core issues of the dispute, including the impact of revenue disruption that occurred following the transition and integration of our hotels in April. We have come to an agreement, on what we believe are critical revenue management and other booking functionalities to be implemented that are necessary for our hotels to deliver the level of performance. They are capable of achieving over time. The key operational and economic terms of the settlement as detailed in our recent 8-K filed with the Securities and Exchange Commission are as follows. Wyndham agreed to reestablish at its expense certain systems, tools and processes we have identified as critical to revenue management, call center technology and the administration of corporate and group bookings, that are at least reasonably equivalent to the legacy systems including implementation of an enhanced dynamic, best available rate-setting tool, implementation of an enhanced direct billing system for corporate and group clients and redeployment of certain legacy booking tools.
Wyndham has agreed to a settlement payment to CorePoint of approximately $20 million in cash. These are proceeds that were partially offset the revenue disruption in our business. We have already received approximately $10 million and the balance will be paid over time and satisfied in full by no later than June 30, 2021. As a settlement to the previously disclosed and outstanding tax matters agreement related to the spin-off, Wyndham will make a cash payment of approximately $17 million to CorePoint during November 2019. And lastly, we now have reached agreement on franchise transfer approval criteria related to asset sales, that should importantly better facilitate our disposition strategy.
We are pleased to have reached the settlement and to be collaborating with Wyndham in the newly installed leaders at their management company to improve the