Hersha Hospitality Trust (HT) Bank of America Merrill Lynch 2012 Global Real Estate Conference Call September 13, 2012 2:10 pm ET Executives Jay H. Shah – President and Chief Executive Officer-Hersha Hospitality Trust Michael D. Barnello – Chief Executive Officer-LaSalle Hotel Properties Mark W. Brugger – Chief Executive Officer-DiamondRock Hospitality Co Kenneth E. Cruse – Chief Executive Officer-Sunstone Hotel Investors, Inc. Analysts Andrew G. Didora – Bank of America/Merrill Lynch Shaun C. Kelley – Bank of America/Merrill Lynch Presentation Andrew G. Didora – Bank of America/Merrill Lynch
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Well, this recovery has been interesting the steadiness to date; it has been a product of business trends more than anything for our portfolio, and just in the business trends, the recovery actually occurred before the recovery in RevPAR for our industry. So the business trends probably is going on for greater than 12, 35, 40 months. What we have is today and what we are now starting to see over the last three, or four quarters is the Group business. So strength in the business has been very good. Now we’re seeing an added layer of strength and demand trends on some good business.We’ve talk about peer some and all of our peers have said similar statistics, where pace of the industry is up 6%, pace for the team is up 13% and more importantly productivity, which is our Group room focused our future period, year-to-date is up 20%. That is a hugely positive background, I think we’ve got, good urban growth of continued growth in the industry, but to answer your question directly that to-date trend is larger than field by business trends and for those travelers are cutting back on their own. Andrew G. Didora – Bank of America Merrill Lynch Okay. Mark how does aligned with what you’re seeing, I mean you guys also have a number of larger Group boxes Marriott 20 year preferred partners and currently, they have a little line on the Group side so, are you seeing the same trends that Ken seeing and kind of did you guys see a bit of difference going into the second half in terms of some of that booking behavior because a we know a lot of it’s really tied and be forth in we’re locked into book for the route, but it seems like that might be starting to change?
Mark W. BruggerThis is trying to came back, we’re seeing in the Group side this is the best year, if you look at the kind of normal recovery of Group the trend lines over the last couple of cycles, it’s a little later in the cycle coming back in some of the other cycles we've seen particularly in the last two. So Group is coming back, now you’re seeing the pace increased throughout this year, it is market-by-market, it is quarter-by-quarter. We're seeing what we saw a lot of strength in our portfolio in the second quarter particularly Chicago, Boston, we’re seeing a lot of strength in the fourth quarter, Q3 for us this summer a little bit extended. To this last group compression, but as we kind of finish out the year, we’re seeing very strong results and booking pace in a number of our markets; I would say five or six different markets are showing very good growth in the fourth quarter. So we’re seeing the positive trends in Group, but this trends remains strong and we are just seeing again it’s market-by-market, we just hanging then there as well. Andrew G. Didora – Bank of America Merrill Lynch On the Group scene market and if you find our business most exposure have the panel to group. Where do you see outside the room spending to it? Mark W. Brugger Outside of interesting for us have been lighting as well not only had the Group’s productivity been weaker, (inaudible) up to cause at the beginning of 2011, that started to improve, but even through the course of 2011, you heard us talk about ancillary spend, those are the revenue streams that Group rooms are usually producing. So we are nowhere near where they should have been based on historical norms. Read the rest of this transcript for free on seekingalpha.com