Operator: Thank you. Your next question comes from the line of Duane Pfennigwerth from Evercore ISI.
Duane Pfennigwerth: Thank you. For the resort markets in your portfolio, where would you expect the highest growth rates to be this year? I mean, you clearly sound a little bit more upbeat on Florida. But as you look across the portfolio, what do you think would outperform and what would you expect to lag on the resort side?
Mark Brugger: Yes, sure. So I think in our prepared remarks, we talked about South Florida. We were encouraged on have markets like Charleston, which have been terrific. We would expect that to pull back a little bit this year. I’m trying to think of what other markets have go through — wine country, Sonoma, we’re seeing some pullback continue there. So we expect those to be on the lower end of the growth scale to give a barbell on the resort portfolio.
Duane Pfennigwerth: Okay. Thanks. And then just on the — just to follow up on the prior questions on acquisitions. Should we assume that a big disposition would need to happen first? And if you get that done, how would you be looking to shape the portfolio? Where do you feel that you’re under-indexed?
Mark Brugger: Great question. So Jeff went through our balance sheet, our capacity. We feel like we have excess dry powder right now, so that’s not the hesitation. It’s not a dry powder issue. We have a very attractive balance sheet and we’re sitting on cash and a completely undrawn revolver, and our metrics are excellent. So it’s not a capacity issue; it’s really an opportunity issue. And then when you think about what kind of opportunities, given that we think we trade at a significant discount to NAV, would be accretive to shareholders at this point, it’s going to be more of the kind of things that we think are our core capacity. So we’re looking at things where we think we can put in our [indiscernible] best practices or it might be an owner operator who hasn’t kept up with the market on moving rates or may not be efficient in labor practices and other things that we can bring to the table.
Those are the inefficiencies. We’re unlikely to buy a luxury asset that’s well run in a competitive process. That’s just not going to be accretive for our shareholders. So we think the best acquisition opportunities and the best accretive opportunities remain the kind of assets [indiscernible] buying, which are these really experiential, differentiated assets — generally, markets that are incredibly hard for new supply to enter. And we think that the consumer and the traveler today and over the next decade, where the outsized growth is going to be, is where you can provide something that’s really a unique and differentiated experience for that traveler.
Duane Pfennigwerth: Great. Thank you.
Operator: Thank you. Your next question comes from the line of Chris Woronka from Deutsche Bank.
Chris Woronka: Hey. Good morning, guys. So Mark, appreciate all the color so far. Can you maybe talk a little bit about how you’re thinking about summer this year? You kind of hit on it a few minutes ago. But last year, I think there was a little bit surprise at how much domestic travel went outbound. And maybe the expectation is you’re going to get more inbound this year or maybe you think folks are going to stay home. Just any — is there any kind of confidence you can give us, any bookings you have right now for summer that make you feel better?
Mark Brugger: Yeah. I mean, I think the fundamental thing that makes me feel better is that it’s going to be our strongest group quarter. So unlike last summer, what we’ve done this year is to really take the group and not rely on the short-term [indiscernible] showing up. So to the extent we can put a group in there, we’re putting a group in there. And then if you — as we talked about in the prepared remarks, a lot of the strength — and certainly, our strongest quarter based on the current bookings is going to be Q3. So we feel good about our positioning, but we are taking a little bit of a defensive position in that we’re trying to group up where it makes sense to group up and not be reliant, like we were last summer, on a lot of that short term, both leisure and corporate travel.
Chris Woronka: Okay, great. And then obviously, a strong, strong job on the cost front ’23. And it sounds pretty benign for ’24. You did mention labor. I guess, do you have any labor situations, any union markets, even though you wouldn’t be union? Any markets later in the year that you’re keeping an eye on for a reset next year?
Mark Brugger: I mean, we’re always looking at the market to make sure that our wages are staying competitive with the set, whether they’re union or non-union hotels. Last year, the story was really the LA story. But there are — so Chicago got — that was a relatively mutually win-win agreement, I’ll call it, their negotiation. And we’re optimistic that we have that in Boston as well coming up. But there’s nothing that’s on the radar now that we think we’ll be talking a lot about as we move through the year or that makes us particularly nervous on the expense side in 2024.
Chris Woronka: Okay. Appreciate that. This last one is just kind of on the acquisition disposition. I hear you on expectations of lower rates. That may be up for debate a little bit. But I guess the question would be — we’re also hearing about more distressed or semi-distressed stuff hitting the market. I mean, I assume that’s a good thing if you’re a buyer, but you mentioned some non-core sales. Maybe not necessarily the best thing if you’re a seller. Any thoughts on how it could play out?
