Michael Bellisario: Got it. Just wanted to clarify that. And then just on the 24 numbers for Scottsdale, just to clarify there, if it’s net positive too from renovations. But you expect the year-over-year to be down. Is that sort of at least net three negative sort of like-for-like? Is that all in the first quarter then? Or is that going to be spread out more between 1Q and 2Q?
Atish Shah: Yes, it’s mostly first quarter. That’s where we saw kind of more of a strength. At least relative to this year, there’s a tad bit in the first month of the second quarter, but it’s mostly first quarter.
Michael Bellisario: Got it, okay. And then just last one for me, probably for Barry here. I think you mentioned meaningful improvement in group performance, group trends in a few of your key market. Any incremental color you could provide there maybe what’s driving that optimism in that upside?
Barry Bloom: Yes, I think in part, it’s a shift back to — like everything else is shifting. It’s a little bit of shift back to our more normal group patterns, where we’re seeing a much more blended mix of kind of corporate group, association group, and SMERF group, and where that’s falling across the year, it’s falling in the more traditional places. So you don’t have that kind of the big buildup of corporate demand has softened. While that’s incredibly lucrative business, it’s the shift back to more group of the traditional types you’ve had, we’ve talked about before, right? We had just tremendous pent-up demand from corporate, and association typically book further out. So now we’re getting that association group the books further out.
We’re getting the high-quality summer business in a lot of resorts that it is sports group, stance group, things like that. So it’s just a more balanced group mix across the year, which is ultimately driving higher and better pace, both in room nights and in rate.
Michael Bellisario: Helpful. Thank you.
Operator: Thank you. Our next question comes from Aryeh Klein of BMO Capital Markets. Aryeh, your line is open. Please go ahead.
Aryeh Klein: Thanks. And good morning. Maybe just on the balance sheet with some higher near-term CapEx and EBITDA next year impacted by renovations, how high are you comfortable with leverage getting to or maybe just where do you think it’ll kind of peak out at?
Atish Shah: Yes. Thanks, Aryeh. Well, pre-COVID we had been running the Company from kind this range of low three times to low four times, and that certainly continues to be kind of our target range and the optimal level for us, given the asset profile. That said, there is a lot of recovery potential here over the next couple of years, and we pointed to some of that in prior conversations, as well as the materials we posted. So we do expect there’ll be a natural delevering for the Company, as we go forward here over the next couple of years, given the EBITDA growth, particularly from some of the newer investments, as well as the CapEx. As we think about next year, I think as we talked about earlier, it is a little bit of a balance here, given the level of CapEx we have with other uses that we deem attractive, including buybacks.
And I think where we are leverage-wise, roughly speaking, is about right. We’re north of that low four times higher end that I had mentioned. But again, as we look further out, we think we can comfortably get back into that range. So I would say we’re fine kind of in the high-fours, maybe even a little bit higher, just given the recovery potential of the business. So hopefully that gives you a little bit of color into how we’re thinking about leverage in the balance sheet in light of what we’ve got hoping in terms of CapEx and how we’re thinking about share repurchases and continuing to be active there.
Aryeh Klein: Appreciate that. And then on the Hyatt and Scottsdale, curious about how you think about maybe starting to hold down or if you would consider that in an effort to accelerate the renovation timelines? And if not, I guess why not?
Marcel Verbaas: Yes. We, obviously, looked at that very extensively to see what we thought the rights approach would be. And if anything that says to do, that would have been in the last — really kind of the last few months, as opposed to going forward. But even with that, we looked at it very closely to make sure that we felt that we were not hurting ourselves financially in the short term, but also not hurting ourselves with a ramp-up, if you have to open the hotel back up. And the good thing about this hotel is that you’ve got some pretty distinctive areas of the hotel, from a guestroom perspective, where you can easily do one side of the building and have the other rooms on the other side of the building available. And that’s what we’re working through right now, as we’re doing the guestroom renovation to make sure that we get through the first half of the building first, and then have to second half available really when the pool complex has done at the beginning of next year.
So that probably, it might be helpful for me to expand on that a little bit because we’ve, obviously, talked about this in meetings before, but maybe not quite as granular way as we’re — as I’d like to do now, which is we really have a strategy of making sure that we can attract leisure business, primarily in the first half of next year, but having the pool complex complete, and by getting the guestrooms complete us really here in the fourth quarter and the first quarter of next year, and being able to drive the leisure demand into the hotel first, while the meeting space isn’t available yet with the expanded meeting space that we’re doing. And then over the summer in the kind of slower periods that naturally occur anyway, really tackling, primarily, the F&B operations.
So we have a very well-thought-out process here of how we’re staging this whole renovation, and trying to minimize disruption in getting the pieces going as quickly as we can. And we feel very strongly that we’re not losing a lot of time, honestly, by not closing down the resort entirely, but that we’re actually managing through this the best way possible, maximizing our cash flow during this time frame without really losing any kind of time in completing this process.
