CorePoint Lodging Inc. (NYSE:CPLG) Q3 2019 Earnings Conference Call - Final Transcript

Nov 13, 2019 • 05:00 pm ET

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CorePoint Lodging Inc. (NYSE:CPLG) Q3 2019 Earnings Conference Call - Final Transcript

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Q & A
Analyst
Omer Sander

[Operator Instructions] Our first question comes from Omer Sander with J.P. Morgan. Your line is now open.

Hey guys, thanks for taking the questions.

Executive
Keith A. Cline

Hi Omer.

Analyst
Omer Sander

So just wanted to ask about the core portfolio, maybe get a little bit more color about performance in the quarter and any other KPIs you might have, RevPAR index and how margin that those hotels are tracking? As well as, if you could provide a little bit of color on the geographic mix there?

Executive
Daniel E. Swanstrom

Sure. Good afternoon, Omer. This is Dan. From a core perspective, as you kind of look at RevPAR, year-to-date versus the non-core portfolio, the core portfolio is tracking at about 100 basis points, stronger performance relative to the non-core. As we've mentioned before, the non-core portfolio consists of predominantly economy and lower mid-scale chain assets and the non-core from a geographic region, is primarily concentrated in states like Texas, Southeast Florida, Georgia and Midwest.

Analyst
Omer Sander

Okay, great. And then could you comment maybe on EBITDA margins, that there was hotels relative to the rest of the portfolio?

Executive
Daniel E. Swanstrom

Yeah, the margins on the core portfolio are significantly stronger than the non-core portfolio. The non-core portfolio as we had mentioned in the past and we've included in prior investment presentations, tracked in like mid to high single-digits, around 7% to 8% EBITDA margins, whereas the core portfolio is significantly higher north of 20%, closer to kind of 25% margins. So as you kind of look at the margins, in particularly for the third quarter, the core portfolio was around 23% and the non-core was in that kind of low to mid high single digits, which blends to kind of low '20s for the overall portfolio.

Analyst
Omer Sander

Got it. And then, that's helpful. And then additionally, so on the Wyndham agreement and maybe just to get a sense of trends throughout the quarter. I think on the last call you called out a pretty tough July, I guess looking sequentially through the quarter and maybe early into the 4Q, have you seen kind of trends improving through your portfolio and I'll see you in a tough macro and industry environment?

Executive
Keith A. Cline

Well, let me talk a little bit about 4Q and we can provide any additional color on 3Q that we need. If you think about 4Q one thing to keep in mind is we've got a pretty tough year-over-year comp in the fourth quarter if you could recall, to the fourth quarter of last year, our comp RevPAR performance was up well over 9% in the fourth quarter. So we had planned our year with a fairly tough comparison on a year-over-year basis as you look at the performance in the portfolio, sequentially between quarters as you go from Q2 to Q3, we did see on both a aggregate comp RevPAR performance as well as an aggregate market share performance, a slight erosion in Q3 compared to Q2.

Analyst
Omer Sander

Awesome. Thank you. And if I could just sneak one last one in, you mentioned on the