Summit Hotel Properties, Inc.’s (INN) CEO Dan Hansen On Q3 2020 Results – Quick Version Earnings Call Transcript

Summit Hotel Properties, Inc. (NYSE:INN) Q3 2020 Earnings Conference Call November 4, 2020 8:50 AM ET

Company Participants

Adam Wudel – Senior Vice President of Finance and Capital Markets

Dan Hansen – Chairman, President and Chief Executive Officer

Jon Stanner – Executive Vice President and Chief Financial Officer

Conference Call Participants

Michael Bellisario – Robert W. Baird & Co.

Neil Malkin – Capital One Securities, Inc.

Austin Wurschmidt – KeyBanc Capital Markets

Dany Asad – Bank of America Merrill Lynch

Chris Woronka – Deutsche Bank

Bill Crow – Raymond James

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Operator

[00:00:05] Good morning and thank you for standing by and welcome to the Summit Hotel Properties Inc third quarter Twenty twenty earnings conference call. At this time, all participants want to listen almost after the speakers presentation, they’ll be a question and answer session. Ask the questions on the session, you need to first start the one on your telephone, please be advised that today’s conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today. Adam Wudel, senior vice president of finance and capital markets. Please go ahead.

Adam Wudel

[00:00:43] Thank you, Sarah. And good morning, I am joined today by someone Hotel Properties Chairman, President, Chief Executive Officer Dan Hansen and Executive Vice President and Chief Financial Officer John Stanner. Please note that many of our comments today are considered forward looking statements as defined by federal securities laws. These statements are subject to risks and uncertainties, both known and unknown, as described in 2019 form 10K and other SCC filings. Forward looking statements that we make today are effective only as of today, November 4th, Twenty twenty, and we undertake no duty to update them later. You can find copies of our SEC filings and earnings release, which contain Reconciliation’s to non-GAAP financial measures referenced on this call on our website w w w that reads Dotcom, please welcome some hotel properties. Chairman, President and Chief Executive Officer Dan Hanson.

Dan Hansen

[00:01:44] Thanks, Adam, and thank you all for joining us today for our third quarter Twenty twenty earnings conference call, the third quarter was again challenging for our industry as leisure travel continued to serve as the primary demand source. However, we were encouraged by the continued sequential demand improvements, which led to operating results that were considerably better than the second quarter. Rev par improved each month of the quarter across our portfolio. And importantly, this trend continued into October, which provided us with some level of reassurance of the sustainability of demand in the weeks following Labor Day, a period of significant uncertainty heading into the quarter. Occupancy increased each month of the quarter, peaking at 47 percent in September, which led to third quarter up out of forty seven dollars, sixty three point five percent decline year over year. But that was a significant improvement from the second quarter of twenty three dollars. Market share gains were substantial once again in the third quarter as we finished with one hundred and fifty one percent wrap our index, an increase of approximately thirty nine percentage points compared to the third quarter of last year and an eight percentage point increase relative to last quarter. These gains reflect the tremendous work done by an asset and revenue management teams, along with the tireless efforts of our management company partners to capture the limited demand that currently exists in the market.

[00:03:07] We have clearly been successful capturing our fair share of very short term leisure demand, better results have been further aided by capitalizing on certain unique pieces of business and small groups that book during the quarter, some of which were related to the damaging wildfires on the West Coast and the storms in the Gulf of Mexico. Preliminary October results reflect a modest continuation of the improvements we experienced throughout the third quarter as October is expected to finish at fifty dollars with the highest ADR of any month since the onset of the crisis, running nearly ten dollars higher than the rates achieved in the second quarter. Occupancy in October was over forty seven percent across the total portfolio, more than 20 full percentage points higher than the second quarter occupancy and flat to September, despite the strong Labor Day weekend results, excluding the five hotels that were either closed or consolidated into adjacent operations at various times during the quarter, occupancy was more than 50 percent in October. The trend of weekend occupancy and our performance continued in the third quarter as leisure travel, particularly in drive to and CBD markets, continued to provide the vast majority of demand across the industry. Weekend occupancy was 56 percent during the third quarter as a relative outperformance compared to weekday results accelerated each month during the quarter.

[00:04:30] This led to weekend rent part that was 40 percent higher than our weekday. Rents are primarily driven by occupancies that ran nearly 20 percentage points higher by the end of the quarter. Despite lagging weekends on a nominal basis, weekday demand in the quarter increased commensurately, with weekends on a percentage increase basis as occupancy and rev par nearly doubled from the second quarter. Weekend activity at our hotels located in markets we consider as drive to was nearly sixty four percent in the third quarter. Our extended stay hotels, which comprised only a quarter of our total guest rooms, were also relative performers again during the third quarter, finishing with occupancy of more than sixty three percent and exceeded 60 percent in each month of the quarter while achieving a 51 percent of our premium to our overall portfolio. This trend continued as our preliminary results indicate. Our extended stay hotels achieved 65 percent occupancy for the month. Our suburban and airport hotels, which comprise more than a third of our portfolio guestrooms, we’re also our performance during the quarter, posting occupancies of 58 percent and 56 percent, respectively, both increases of more than 20 percentage points from the second quarter results. These hotels achieved our premiums of 27 and 29 percent, respectively, to the total portfolio in the quarter.

[00:05:57] Urban hotels have continued to lag the industry recovery, though occupancy increases for our portfolio during the quarter were in line with all other location types finishing the quarter 20 percentage points higher than in the second quarter. Rafaat growth at our urban hotels led the portfolio on a percentage increase basis relative to the second quarter, posting a nominal rev par two and a half times higher than our urban portfolio. Second quarter Rahbar. Our hotels continue to operate with extremely lean staffing models, with labor resources being added back on an asset by asset basis strictly based on improved hotel demand. We are currently averaging less than 14 F.D. per hotel, compared to approximately 30 FDs per hotel prior to the pandemic. Despite this lean staffing model, our team continues to demonstrate a steadfast commitment to prioritizing the health and safety of our guests. Ever changing health and safety protocols and local ordinances provide unique challenges to our business. We are grateful to our brand and management partners for their constant awareness of and compliance with these dynamic policies. Optimizing the guest experience has always been a central tenet of our business model, and that has never been more important than it is today. Finally, to preserve liquidity. We have continued to delay most non-essential capital expenditures for the remainder of Twenty twenty, along with common dividend distributions, which combined preserved approximately 30 million dollars in the third quarter and will preserve 30 million dollars of cash for the balance of the year. I’ll let John speak to the specifics of our balance sheet. But with approximately two hundred and fifty five dollars million of current liquidity and a manageable monthly cash burn rate that has been further reduced as our portfolio operating metrics have improved, we are well-positioned to navigate the recovery. With that, I’ll turn the call over to our CFO, John Stanton.

Jon Stanner

[00:07:54] Thanks and good morning, everyone. We’ve been pleased with the continued efforts of our operations team to diligently manage operating costs at our properties in an effort to maximize hotel level profitability and minimize corporate cash burn rates. In the third quarter, our hotel EBITDA retention across the portfolio with more than 47 percent, which resulted in hotel level profitability in each month of the quarter.

[00:08:19] Positive adjusted EBITDA for the quarter and a reduction of our corporate cash burn rate to an average of just over five million dollars per month, commensurate with increases in our cash burn rate. Improve sequentially in each month of the third quarter and finish September at just four and a half million dollars, the lowest of any month since the onset of the pandemic. This represents a significant improvement from the second quarter, when our cash burn averaged 11 million dollars on a monthly basis. Refah and cash burn rates in October, generally tracked in line with September 11, which is sustained, provides a liquidity runway of nearly five years. We currently have two hundred and twenty five million dollars available on a revolving credit facility and approximately 30 million dollars of unrestricted cash on hand, which combined gives us two hundred and fifty five million dollars of total liquidity. Today, our weighted average interest rate is approximately three and a half percent, and weighted average term to maturity is approximately three point three years, with no maturities until November of 2022. To what we’ve been pleased with, the gradual improvements in our results and particularly October metrics that on a preliminary basis finished ahead of our pre Labor Day expectations, our near term outlook for the business in January remains uncertain. We continue to operate in a very challenging and limited demand environment, and the prospects for a more robust industry recovery are likely linked to future governmental and corporate travel restrictions and significant health advancements, or the passage of time to mitigate the effects of the pandemic that we remain confident the headwinds of our industry will ultimately abate. The timeline has continued to be pushed out, and we now expect a more meaningful increase in corporate and group demand to occur in 2021. Historically, November and December are slower travel months and we would expect modest declines in absolute Rafaat levels.

[00:10:14] From what we achieved in September and October, though, year over year declines will likely remain fairly stable given the seasonality of last year’s results. As we said last quarter, despite the many near-term challenges we face as an industry, we remain bullish on the long term prospects for travel related demand. The uniqueness of this pandemic has forced us all to challenge the pre crisis status quo in nearly every facet of life and travel, particularly work related travel. In a time of unmatched at home technology is at the precipice of that discussion. While it’s not unreasonable to conclude that the events of the last seven months will ultimately lead to a systemic decline in travel, history would suggest otherwise, emphasizing that this is one of the most resilient industries in our economy and that people’s desire to gather in person and travel in the eight prior to the crisis we were witnessing and fortunately benefiting from society’s undeniable shift in preference, away from the collection of material items in favor of experiences and services. And while the pandemic has created an impediment to this progress, we believe those long term trends that were significantly driven by a younger demographic will again reemerge as meaningful themes in the new post covid normal that has been so heavily speculated about here at summit. We are blessed with a terrific portfolio that has been recently renovated, continues to capture significant market share despite the difficult environment, and is poised to lead through the recovery. We have an experienced team and a strong balance sheet with considerable liquidity to manage. Through the crisis, all of which gives us optimism and positions us well for the brighter days ahead. And with that, we’ll open the call to your questions.

Question-and-Answer Session

Operator

[00:12:06] Thank you to ask the question, you would need to press the other one on your telephone to withdraw your question, please press the pound key. Our first question comes from the line of Michael Bellisario with Baird. Your line is now open.

Michael Bellisario

[00:12:25] Good morning, everyone. First, just on the demand front, I’m hoping you can give us a little bit of a breakdown of what you’re seeing on the ground, maybe what segments have improved the most, what segments are still lagging, and then maybe your take on what piece of the business is a little bit more temporary and maybe we’ll need to get replaced next year or whenever we’re in a more normalized demand environment.

Jon Stanner

[00:12:55] Sure, this this is John look, I think, you know, from a segmentation perspective, as you would expect, leisure continues to be the predominant demand source at the properties, as we mentioned in the prepared remarks.

[00:13:07] But we have had some good success capturing some of the smaller, you know, more unique type group business. Some of it, I think is more sustainable. We’ve got sports teams and other social events. That’s probably more normal type of business. We also benefited, you know, in the quarter for some, you know, kind of one time demand items related to storms in the Gulf and fires on the West Coast. You know, some of those that won’t necessarily repeat. I do think we started to see, you know, some small signs of return of of corporate travel, not in a meaningful and I think sematic way in any way. But we do have pockets of demand across the portfolio where we have good corporate demand. We’ve got a hotel still in the suburbs of Portland and Hillsboro that still runs very high occupancy. And most of that is corporate demand. We’ve seen good corporate demand strength and Silverthorne in Colorado from some some auto companies that do high altitude testing out there. So there are certainly pockets of that demand. And then clearly that has been and continues to be the laggard. And that’s, you know, part of the expectation for that to start to recover into next year in a more normalized demand environment.

Michael Bellisario

[00:14:12] Got it. And then on the CapEx front, can you maybe provide your your outlook there for the remainder of this year? And then as you’re thinking about Twenty twenty one, I know it’s still early, but maybe what flexibility you have to either spend more or less as you see fit and kind of your initial expectations about CapEx spending for next year? Probably.

Dan Hansen

[00:14:34] Sure. Mike, it’s Dan. You know, I think unfortunately, you know, we have been good stewards of assets and invested, you know, about 300 million dollars over the last six years or so. And our portfolio is relatively young to start with. We we do have the ability and and did this year to significantly reduce what we had planned for the year. We still have maybe five and a half million left this year to spend and feel that we can flex to spend more if business conditions improve, if they don’t because of the high quality and the recent renovations that most of our properties, we feel very confident we could get by with, you know, a minimal number, you know, as we did this year.

Michael Bellisario

[00:15:24] Thank you.

Dan Hansen

[00:15:25] Thanks, Mike.

Operator

[00:15:29] Thank you. Our next question comes from the line of Neal Malkin with Capital One Securities. Your line is now open.

Neil Malkin

[00:15:39] Hey, guys, good morning.

Dan Hansen

[00:15:39] Morning.

Neil Malkin

[00:15:42] Hey, I was hoping if you could give an update on sort of your conversations with the brands in terms of, you know, any brand standard changes, operating model adjustments that you can highlight that are meaningful, that have been agreed to or that you see really meaningfully impacting, you know, the model or the fixed cost, I guess, you know, burdens of your already pretty efficient hotels.

Dan Hansen

[00:16:16] Sure, Danny. We’re in very close contact with the brands they’ve had, they’ve had great dialog, they’ve created working groups of which were a part of from, you know, top owners and management companies to really help, you know, design, you know, cleaning and health and safety standards on the operating model. You know, obviously, we are adapting our model to eliminate the cleaning. Estela’s, you know, offset by some more frequent cleaning of public spaces. And, you know, the food and beverage offerings are now running as mostly a grab and go model and starting to have some limited menu offerings in selected locations. So I think those type of is it pertains to, you know, the cleaning customers and modifying food and beverage, I think are, you know, two key things that, you know, we are hopeful we’ll have, you know, flexibility in in, you know, tailoring those to not just our guests and our locations, but, you know, through the profitability of the hotel. So, you know, we’re optimistic as as you would expect, the brands have been been good partners and hopefully will be able to find some some ways, as you pointed out, you know, we already have a really great operating model. But, you know, little enhancements will certainly make it better.

Neil Malkin

[00:17:40] Ok, and then I don’t know if I missed this, but you talked about John said something about more meaningful corporate and group demand into Twenty twenty one. Did I hear that correctly? And then if that’s the case, well, what what gives you confidence in that? Is it is it maybe some some smaller regional business demand, some clients that have, you know, kind of articulated that to you, that they plan on being there? You know, what what kind of gives you that confidence or, you know, makes you feel that way?

Dan Hansen

[00:18:16] Yeah, sure. You know, I think the the comment was really that, you know, kind of a timeline for when we expected that type of demand to come back has has really continued to be pushed out. And we now expect that to return more meaningfully in twenty one. You know, I think what gives us some level of confidence is that, as you mentioned, you know, we are seeing some, you know, sporadic pockets of demand. It’s really more leisure. So it’s really more a regional type of of travel from a corporate perspective. You’re not seeing the big, you know, national accounts, the big technology companies, the financial services firms that that may be otherwise associated with corporate travel demand. But we do believe there’s some pent up demand for from corporate travel demand. And a lot of what’s inhibiting that today is restrictions, you know, specifically corporate restrictions that over time we will believe will be lifted.

[00:19:03] And once those are lifted again, there’s some pent up travel, some corporate demand that we think will ultimately manifest itself in, you know, increases in corporate travel.

Neil Malkin

[00:19:14] Ok, last one is actually in Orlando. It’s pretty good sized market for you guys. Just wondering, you know, what what your sense is for when you know Disney and Universal, you know, if you’re in contact with them, you know what they’re kind of plan is for reopening, getting to more of a normal level. And, you know, obviously that’ll have a fairly big impact on your your portfolio there.

Dan Hansen

[00:19:44] I would think that, you know, we’ll start to see more traction from the holidays and that point forward, as John pointed out, I think, you know, leisure travel has been fairly strong and resilient.

[00:19:57] And, you know, we think that’ll that’ll translate into positive, positive and growing numbers. And in Orlando particular’s.

Neil Malkin

[00:20:07] Thank you.

Operator

[00:20:12] Thank you. Our next question comes from the line of Austin Wurschmidt with KeyBanc Capital Markets. Your line is now open.

Austin Wurschmidt

[00:20:20] Hi, good morning, guys. Just curious, going back to the demand breakdown, I’m curious, what do you guys attribute to the strength and weekday rates and sort of the post Labor Day trends holding up better than expected? And then also curious if you have a sense whether an increased percentage of your guests are flying into locations is the TSA data has has kind of taken a leg up post Labor Day.

Dan Hansen

[00:20:48] Yeah, sure, you know, I think, you know, we looked at October, I think what we saw was really a continuation of what we saw, you know, take a Labor Day holiday out for a second. But really what we saw late into August and through September really continued in in October. And that was, you know, far stronger performance on the weekends than weekdays, far stronger performance and kind of a non core, you know, urban CBD type type of hotels. So I don’t necessarily have a great insight into how much of that was drive to or fly to. I do think it continues to be much more heavily drive to. We certainly see the TSA travel metrics. I think we’re encouraged that there continues to be, you know, slight sequential increases there. But I don’t think it reflects a significant change in the nature of the demand.

[00:21:33] I think it really reflects more a continuation of what we saw of, you know, late in the summer into the early parts of fall.

Austin Wurschmidt

[00:21:41] Appreciate and then turning to kind of dispositions, I mean, we’ve seen some of your peers explore dispositions, you know, I recognize you guys have ample liquidity at the current cash burn rate. But as you do think about leverage and restrictions under your credit agreement, aside from the obvious benefit being a recovery in fundamentals, what other options are you exploring today?

Dan Hansen

[00:22:11] Look, asset sales are certainly, you know, a very good option for us and something we definitely consider, you know, we’re just not a distressed seller, as you pointed out. So I know there’s a lot of capital out there and I think our type of assets are in high demand. You know, as we pointed out multiple times, you know, our hotels are generally younger, renovated in great locations. So definitely I would expect, you know, continued interest in those. And, you know, should those opportunities come up where where there’s a trade to take place, you know, it’s something we would definitely be high on our list.

Austin Wurschmidt

[00:22:48] Ok, that’s fair, and then just last one, you referenced the the Rapture index, you know, I think it was one hundred and fifty one percent or so versus your concept. Is there any risk in the ability to continue capturing that relative outperformance? And and is that just a function of the mix of business you’re capturing versus peers or are you running, you know, fairly meaningful, meaningfully higher occupancy rates as well? Versus versus the comps?

Dan Hansen

[00:23:17] Well, you know, I’d like to you know, there’s two parts that obviously we’ve got, you know, a great asset management and revenue management team that are driving, you know, incremental, you know, business.

[00:23:27] It’s a little bit unique to our company having, you know, in-house revenue management that, you know, can look across the entire portfolio and and pick unique spots to, you know, drive drive revenue. Part of that gain, admittedly, is also coming off a smaller number. So there is a point where it is inflated because it’s coming off, you know, a very low base number. But that in any it shouldn’t in any way, you know, point to, you know, the lack of, you know, hard work and effort and high quality of the portfolio. So to maintain it, you know, I think in this environment, we feel very good about, you know, for that to maintain, you know, for, you know, multiple years, it gets it’s a little bit more challenging.

Austin Wurschmidt

[00:24:18] Thanks.

Operator

[00:24:21] Thank you. Our next question comes from the line of Dany Asad with Bank of America. Your line is now open.

Dany Asad

[00:24:28] Hi. Good morning, guys. So I have two questions. My first one is more like the operating model. So would you think Labor looks like, you know, once we return to, you know, prior peak in terms of occupancy? So if I heard you correctly, you think we’re down to like 14 F.D. how many, you know, at these you think we would need and a normalized environment for your portfolio?

Dan Hansen

[00:24:57] Dan? You know, it’s a great question. And I think it’s it’s going to depend on the type of hotel. You know, we do have some hotels that, you know, have, you know, very good, you know, bar business. And that will need to kind of restaff, you know, as as the demand comes back. We also have some hotels that run, you know, very high occupancy that, you know, we’re going to need from, you know, we’re going to need to get the majority of our housekeepers back. And if there is a property that has, you know, a lot of one day stays, you know, that that doesn’t give us the ability to not clean to stay over because they’re checking out every day. So I think each property will be a little bit different. But we would expect and, you know, the vast majority of our properties to, you know, be lower than it was at prior peak, which, you know, we think is positive, you know, for, you know, the industry and specifically our operating model.

Dany Asad

[00:26:00] Got it, and and then, John, maybe this one might be a little bit more for you, but, you know, you’ve done really well at managing, you know, your liquidity and we’re now coming down on the cash for number. So, you know, what’s your thought process on managing that liquidity runway? And how does that factor into, you know, your and your JV partners process on potential acquisition capacity and the appetite for it?

Jon Stanner

[00:26:28] You know, as you said, we’ve been fortunate that, you know, our cash burn rate is, as you know, very, I would say, manageable levels at this point. It is something that, you know, we continue to manage very, very closely. You know, as Dan referenced, you know, from a CapEx spend, you know, we’re still spending kind of the minimum amount that we can to make sure we’re managing cash burn. We just talked about labor in fees at the properties. And so we’re still managing those line items incredibly closely, you know, to try to get back to, you know, a break even level, which, you know, we’re hitting on the weekends. We’re not there midweek or kind of for the full week. But we are we are getting there, you know, on the weekends. So we don’t need that much more incremental demand to kind of push us over to a break even level. I would say there certainly, you know, an appetite, you know, from both are from both us and our JV partners to at some point in time, you know, take advantage of what we think are going to be some pretty attractive acquisition opportunities. We obviously have some constraints today from our balance sheet and our and our bank waivers that will need to be worked through. But we do expect, you know, one, there to be a pretty deep set of opportunities into a fairly long window to execute those on. So, you know, today, I think that we’re certainly watching everything that’s happened in the transaction market. There hasn’t been a lot of trades. We do expect those opportunities to become more meaningful as we get into next year and beyond.

Operator

[00:27:56] Thank you. Our next question comes from the line of Chris Woronka with the bank. Your line is now open.

Chris Woronka

[00:28:04] Hey, good morning, guys. I wanted to ask you about the about kind of like for like rates. And I know that if we look at ADR right now in totality, it’s just because of mix shift and so much more leisure than corporate. But is there any way to kind of get at where you are on like for like rates, especially on some of the non leisure stuff that you are seeing kind of midweek? And, you know, are you having any or hearing anything through the brand companies about, you know, any kind of corporate feedback for four rates as they begin to think about traveling again next year?

Dan Hansen

[00:28:45] Yeah, yeah, you know, this is a great question, Chris, I mean, it’s something that I think we’ve we’ve debated, you know, extensively internally is what is a more normalized environment. I think what the data would point to today is that rates are down even within the same segment. I think clearly what you’re seeing is a significant, you know, highly unusual shift in mix, you know, towards, as you mentioned, lower rated leisure demand away from higher rated corporate demand. And how that looks like and how that shakes out when we get into a more normalized environment, I think is still very much up for debate. You know, this is not a traditional RFP type of season. I think you’ve probably heard that multiple times. I do think we’re hopeful that, you know, I think what we’ll see from an RFP perspective is, you know, accountants wanting to maintain some level of pricing flexibility to be able to price on a dynamic pricing basis. But hopefully, you know, continuing to use in many in many instances based twenty twenty rates would hold into Twenty twenty one.

Chris Woronka

[00:29:49] Ok, helpful and then is we think about kind of that that operating model question and, you know, I know probably no final decisions have been made yet, but how do you think about the stay over housekeeping being either, you know, kind of permanently eliminated or making an add on or perhaps it’s different based on a category or something like that? But what are your longer term thoughts on that?

Dan Hansen

[00:30:20] Dan, those are kind of the thoughts and we like flexibility and and I think that is, you know, continued discussion, you know, with the brands and how do we, you know, affect that change on a, you know, minimal basis going forward? And, you know, what does that mean? Is it by request only? And is there a cost for that? And I think there’s a lot of different ways to look at that. So I think that that was the question earlier. We talked about, you know, how do we look at, you know, staffing coming back? You know, that in and of itself, cleaning stay overs will be a big part of that. You know, fortunately, we only have one union hotel, so we do have a lot of flexibility. I mean, right now we’ve got, you know, general managers mopping floors and changing sheets. And that’s they’ve been been gracious and have been working hard. But we do need to get team members back to their, you know, fully their core job, which is, you know, driving sales and revenue and keeping guests happy and guests safe. So we do think a lot of that comes back and that in and of itself that not cleaning the stairs or, you know, as requested, I think is one of the unanswered questions that, you know, as owners, we’re still trying to find a, you know, an elegant solution for.

Chris Woronka

[00:31:41] Ok, great. And then just finally, can you maybe give us an update on where your portfolio is? I’m kind of the key was the mobile entry and where you might hope to get through in the next couple of years.

Dan Hansen

[00:31:57] Yeah, so it’s a great question. Thanks for asking. All of our properties, with the exception of two, are fully operational with keyless entry and we will have the remaining two done here and before the end of the month. So it was a commitment we made early on to finish up quickly to be, you know, consistent with, you know, guest preference and having the ability to do it for as much of a frictionless experience as they could. So we’ve made great progress and be completed fully here in the next several weeks.

Chris Woronka

[00:32:37] Ok, very good, thanks, guys. Thanks, Chris.

Operator

[00:32:42] Thank you. Our next question comes from the line of Bill Kro with Raymond James. Your line is now open.

Bill Crow

[00:32:49] Good morning them, given your role, owner advisory committees and various brands. I’m just curious whether there’s a risk that you perceive out there that that may be one brand family, whichever one it might be, might try and gain significant market share by either promising during the steak room cleaning or elimination resort fees or something. That just is a pretty good uniform views on these things across the different platforms.

Dan Hansen

[00:33:24] I don’t know if I would say there’s there’s uniform views, I think there’s uniform understanding. I think they’ve all recognized that the their partners, which are their owners, are in need of, you know, enhancements to the business model. And these were discussions that that were had prior to the pandemic. So it’s not something that just came out of the pandemic. So I think there is some consistency with an understanding, but I don’t know that there is, you know, a common view on how they’re going to implement that. Certainly, one could take, you know, an aggressive stance early and become, you know, a brand of choice. From my own perspective. I think, you know, that’s a very real possibility. But I don’t know if they’ll be something that will be, you know, consistent and equal across the board. They all have their their unique brands. They they very much focused on, you know, guest satisfaction, as are we still finding that, you know, elegant solution to be able to market behind it and keep guest satisfaction scores high is is certainly top of mind. But I would I would say that, you know, there’s a clear understanding, but probably not exactly, you know, a shared plan.

Bill Crow

[00:34:50] Thanks, John, one for you, and I’m not expecting a long answer, but you just tell us how your discussions with the lenders is evolving over the last few months.

Jon Stanner

[00:35:05] Sure. You know, look, we continue to have a lot of dialog with them, you know, given how things have transpired. And, you know, again, as demand and the recovery continues to be pushed out, you know, we certainly stayed close to them. You know, we recognize, you know, that there’s been a number of our peers or a couple of our peers in a way that have gone back and addressed near-term maturities, you know, probably more near-term liquidity issues and extension of waivers. You know, I think, again, we’re coming into this, I think, from a relative position of strength where we’ve got fairly manageable cash burn rates. I think a portfolio that’s essentially entirely open and poised to recover quicker. And thankfully, we just don’t have any maturities to worry about till November of twenty, twenty two. But I think the discussions with the lenders continue to be very constructive. And as I said, we excuse me, continue to have, you know, a fair amount of dialog with them.

Bill Crow

[00:36:01] Ok, that’s it for me. Thank you.

Operator

[00:36:07] Thank you. We do have a follow up question from the line of Neal Malkin with Capital One Securities. Your line is now open.

Neil Malkin

[00:36:17] Hey, I think this one, Kobe cases are starting. You know, they’ve been accelerating. I’m starting to see in a couple of the blue states or cities either partial shutdowns or reverting or pulling back on some reopening plants, I think Boston or Massachusetts and then San Francisco as well. I’m just wondering what you know, how you think it’ll look this time around if, you know, the second wave continues to pick up in terms of potential restrictions. Again, you know, do you think that that now people have a lot more information and we have a sort of a plan that maybe it won’t be as as impactful to the hotel fundamentals or, you know, our could we see another potential dip over the next, you know, coming months?

Dan Hansen

[00:37:18] Neal, it’s Dan, thanks for the great softball question. Look, I it’s a serious issue and, you know, it affects people different, but there are, you know, clear benefits that cities have seen by, you know, shutting down and limiting exposure. There’s there’s also, you know, clear consequences for, you know, business owners and like us and trying to find that delicate balance when there are lives at stake is always is always tough. I think some of these cities sharing on an overabundance of caution is well founded as these cases continue to grow in certain markets. I think moving quickly here are is smart and, you know, can slow down, you know, spread and hopefully reduce, you know, cases and ultimately deaths. So it’s not surprising that there are cities that are and communities that are moving quickly to do that to the extent that it affects, you know, our hotels and our markets, if it’s in those markets, it certainly will slow things down. But I think making sure that, you know, the health and safety of travelers and is certainly paramount, I do believe it’ll be shorter term and quicker rebound as these things come up. So I’m not sure that that’s, you know, overly insightful. But we do see that there is some risk in these markets that, you know, we have to manage around from a labor perspective.

Neil Malkin

[00:39:05] Thank you. Appreciate it.

Operator

[00:39:10] Thank you. Our last follow up question will come from the line of Austin Wilesmith with KeyBanc Capital Markets. Your line is now open.

Austin Wurschmidt

[00:39:19] Thanks, guys. Just one quick one here. So you referenced in the prepared remarks that October Rev was, you know, at around 50 dollars, and then you went on to highlight that you really don’t need too much additional demand to get you to corporate corporate break-even, which, you know, makes sense based on the cash burn rates. But when you marry that, you know, with the seasonality comments in November and December slowdown, I’m just curious if that potential slowdown, if you’re basing that on historical trends or if there’s something in the booking data that you see looking out that gives you greater pause, you know, given the fact that, you know, business travel is a much more smaller component of demand today.

Jon Stanner

[00:40:01] Yeah, you know, I do think it’s predominantly based on what we’ve seen historically. You know, we’re operating in an environment that is incredibly short term booking window. You know, I think in the third quarter, 70 percent of our room nights booked within seven days and 60 percent of them booked within three days. So, you know, we generally don’t have a lot of visibility from a from a booking window perspective. We have even less today. So it’s hard for us to to use anything but kind of what we’ve seen from historical perspective. I do think we have some level of optimism around the holidays, as Dan talked about, and the pacing data, albeit small, at least around Thanksgiving at this time, is positive. But our expectation is for some level of moderation in the first couple of weeks of November. Again, based mostly on what we’ve seen historically.

Austin Wurschmidt

[00:40:50] Thanks to.

Operator

[00:40:53] Thank you. This concludes today’s question and answer session. I would now like to turn the call back to Mr. Hansen for closing remarks.

Dan Hansen

[00:41:02] Thank you all for joining us today in this time of uncertainty. Rest assured, the team at the summit is experienced working hard for every dollar and we believe we’re positioned very well to get back to growth. I wish you all a terrific week and look forward to seeing everyone in person soon.

Operator

[00:41:23] Ladies and gentlemen, this concludes today’s conference call. Thank you for your participation, you may now disconnect. Everyone have a great day.

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