Sourav Ghosh: Sure. So I’ll start with the second half of your question first. In terms of rates, we feel very good about the rates into Q2 and the rest of the year, what we have on the books. And as Jim mentioned, our group rate is up 6%. We expect business transient rates to be up in the high single digits. In terms of actual demand, it is still very short-term booking. And that goes to my remarks of sort of the short-term pickup that we are expecting. We saw in the fourth quarter, meaningful in the quarter for the quarter pickup that seems to continue. So while we do have a meaningful amount of group on the books, we are still expecting a significant amount of pickup in the first quarter for the first quarter and the same thing in the second quarter.
So from a visibility standpoint, I wouldn’t say it’s incremental, maybe slightly more incremental relative to the fourth quarter. As it relates to our operating model changes, what I do want to point out is we have said the $100 million to $150 million of savings relative to 2019. Those expense savings, we have achieved a bulk of those savings. And frankly, the balance of it is really going to be driven by occupancy coming back. We are still, as Jim mentioned, 10 points off of 2019 from an occupancy perspective. And I would say with every point of occupancy gain, that would equate to roughly 30 to 40 bps of margin gain. So that is pretty meaningful when you think about it. So if we get back to sort of ’19 occupancy levels, you’re looking at anywhere from 300 to 400 basis points of margin improvement.
And one of the things I would like to highlight is when you look at our expenses, specifically to $100 million to $150 million and you compare that really to 2019, our F&B revenues are down for 2023 to the midpoint relative to ’19, 1.5%, but our expenses are actually down 2%. So it shows that all the operating model changes and a big piece of it was in food and beverage has made a huge difference. Sales and marketing expense relative to ’19 for 2023, again, to the midpoint, we’ll be down less than 1%. So again, when you’re comparing sort of the margin performance to ’19, it really tells the story. And like I said, we’ll be only slightly down at the midpoint. And of course, at the higher end of the guidance, we’d actually be above 2019.
Operator: Our next question is coming from Ari Klein with BMO.
Ari Klein: Maybe following up on the margin question. What’s the wherewithal to cut expenses if the macro is a little bit more difficult than you anticipate given some of the labor challenges that we’ve had over the last couple of years.
Sourav Ghosh: Sorry, I was on mute. Apologies. So I’m assuming you’re talking about what if any sort of a pullback we can have if there is a slowdown in the second half. And the reality is, I think we now have a playbook going through COVID as to what would need to happen if there is slow down, and that is really a payoff department by department. So we feel very confident that if there is a slowdown, the changes that we would actually have to make if we are in that situation? And whether that’s modifying hours of operations or driving efficiencies in any single department. So we are going to be well prepared for that.
Ari Klein: Got it. And then just on the balance sheet. Can you update us on your priority and how you’re thinking about acquisitions, dispositions and underwriting and admittedly more uncertain macro?
