Ashford Hospitality Trust, Inc. (NYSE:AHT) Q1 2019 Earnings Conference Call May 3, 2019 11:00 AM ET

Company Participants

Jordan Jennings - Investor Relations
Douglas Kessler - President and Chief Executive Officer
Deric Eubanks - Chief Financial Officer
Jeremy Welter - Chief Operating Officer

Conference Call Participants

Bryan Maher - B. Riley FBR
Chris Woronka - Deutsche Bank
Tyler Batory - Janney Capital Markets

Operator

Good day and welcome to the Ashford Hospitality Trust First Quarter 2019 Results Conference Call. Today's conference is being recorded.

At this time, I would like to turn the conference over to Ms. Jordan Jennings. Please go ahead.

Jordan Jennings

Good day, everyone, and welcome to today's conference call to review the results for Ashford Hospitality Trust for the first quarter of 2019 and to update you on recent developments.

On the call today will be Douglas Kessler, President and Chief Executive Officer; Deric Eubanks, Chief Financial Officer; Jeremy Welter, Chief Operating Officer.

Your results, as well as the notice of the accessibility of this conference call on a listen-only basis over the internet were distributed yesterday afternoon and a press release that has been covered by the financial media.

At this time, let me remind you that certain statements and assumptions in this conference call contain or are based upon forward-looking information and are being made pursuant to the Safe Harbor provision of the Federal Securities Regulation. Such forward-looking statements are subject to numerous assumptions, uncertainties and known or unknown risks, which could cause actual results to differ materially from those anticipated. These factors are more fully discussed in the Company's filings with the Securities and Exchange Commission. The forward-looking statements included in this conference call are only made as of the date of this call and the Company is not obligated to publicly update or revise them.

In addition, certain terms used in this call are non-GAAP financial measures, reconciliations of which are provided in the Company's earnings release and accompanying tables or schedules, which have been filed on Form 8-K with the SEC on May 2, 2019 and may also be accessed through the company's website at www.ahtreit.com. Each listener is encouraged to review those reconciliations provided in the earnings release together with all other information provided in the release. Also, unless otherwise stated, all reported results discussed in this call compare to the first quarter of 2019 with the first quarter of 2018.

I will now turn the call over to Douglas Kessler. Please go ahead, sir.

Douglas Kessler

Good morning and thank you for joining us to discuss Ashford Hospital Trust first quarter results. I want to begin by providing an update on the success we are having with our ERP initiative with Ashford, Inc. Then, I'll review our financial results and other items. Given our approximately insider ownership of Ashford Trust. We believe we have a tremendous alignment with our shareholders which encourages us to thank and act like owners.

Our strategy throughout our 16-year history have consistently focused on ways to create shareholder value. Any of our diligent efforts have been economically transformational and successful over the years. We believe that the ERP is one of these initiatives and will provide meaningful benefits to improve our competitive position as well as increase shareholder value. As we've discussed previously pursuant to the ERP initiative, Ashford Inc. has committed to provide $50 million to the company on a programmatic basis equating to approximately 10% of each new investments acquisition price to be used for the purchase of [indiscernible] property zone by the company.

We believe the ERP has the opportunity to significantly improve returns on hotel acquisitions. The attractiveness of the ERP is to make good deals, great deals. Thus establishing ERP, we have already completed $406 million of high quality acquisitions that have utilized the program which equates to approximately 80% committed utilization of the pledged $50 million of ERP funding. To-date we've received approximately $21 million of the $40.6 million that Ashford Inc. is committed to provide us for the four acquisitions under the ERP.

In January we acquired the Embassy Suites New York, Midtown Manhattan for $195 million. In connection with this acquisition Ashford Inc. committed to provide us with approximately $19.5 million under the terms of the ERP. We expect this newly constructed 41-storey hotel ideally located near Bryant Park in Times Square to benefit from being the only Embassy Suites in the dynamic Manhattan market.

Additionally, as our first direct hotel investment in New York City, we believe the recent positive changes in Manhattan's hotel metrics point to favorable timing of this addition to our portfolio. While this property is still ramping up operations having only recently opened in early 2018 the hotel performed exceptionally well during the first quarter. In March, the hotel's penetration index already achieved our underwriting target for the year. Looking ahead, we believe there's significant upside at the property.

Additionally in February, we purchased Hilton Santa Cruz/Scotts Valley in Santa Cruz, California for $50 million. Our latest acquisitions take advantage of the ERP has an attractive location near the expanding tech market in San Jose and just minutes from Santa Cruz, one of northern California's most desirable beach communities. This property also benefits from being the only full service Hilton branded assets in the Santa Cruz market. The acquisition was partially funded by the issuance of approximately $1.5 million OP units. The OP units were issued at a price of $7 per unit which reflects in approximate 23% premium to yesterday's stock price.

We also assumed a $25.3 million mortgage loan that bears interest at a fixed rate of 4.7% and matures in March, 2025. In conjunction with this transaction Ashford Inc. provided us with $5 million as part of the ERP. Year-to-date the hotel's penetration index has already grown 2.8 percentage points and we're enthusiastic about the future performance of this asset. We believe these acquisitions are highly favorable investments on their own. However, with the ERP the projected return should be even greater.

I can assure you that our underwriting efforts continued to be focused, diligent and with the same high standards to improve our portfolio with the best assets for the best value. We strongly believe that the ERP provides us not only with a competitive advantage but is also structured to enhance shareholder value.

Let me now turn to our first quarter performance. Our actual RevPAR for all hotels for the quarter increased 2.1% while comparable RevPAR for all hotels increased 1.9%. For the first quarter comparable RevPAR for all hotels not under renovation increased 2.7%. For the first quarter we reported AFFO per share of $0.26 and adjusted EBITDAre of $100.5 million. As for our balance sheet, we believe in the benefits of an appropriate amount of non-recourse leverage to enhance equity returns.

We also believe having floating rate debt has several benefits including flexibility as well as being a natural hedge against our cash flows. Over the past couple of years we've been very active and refinancing majority of our existing loans both to improve the spreads compared to the prior loan terms and to extend our maturities. To that end, during the quarter we refinanced a mortgage loan on the Renaissance Nashville and Westin Princeton with a new loan that totaled $240 million and has a lower spread than the previous loan.

Deric will provide more information on that refinancing shortly. With all our recent financing activity, we now have an attractive well laddered maturity schedule. We also seek to maintain a high cash and cash equivalents balance between 25% and 35% of our equity market capitalization for financial flexibility. We note that this excess cash balance can provide a hedge during uncertain economic times as well as requisite funds to capitalize on attractive investment opportunities as they arise.

As of the first quarter of 2019, our net working capital totaled $359 million equating to approximately $2.89 per share which represents a significant 51% of our current share price as of yesterday's close. We also continue to make progress with our investor outreach efforts including organizing and hosting a Key West market tour in April that included several of our REIT peer properties and management teams. The event was very well attended by investors and analysts.

During the remainder of 2019, we will continue to get out on the road to meet with investors to communicate our strategy and attractiveness of investment in Ashford Trust. We look forward to speaking with many of you during upcoming events. Looking ahead, we have a high quality portfolio we - and well diversified portfolio and we remain focused on accretive transactions as well as proactive asset management initiatives.

We're committed to maximizing value for our shareholders as we focus on generating solid operating performance, continuing to seek investment opportunities and efficiently managing our balance sheet.

I will now turn the call over to Deric to review our first quarter financial performance.

Deric Eubanks

Thanks Douglas. For the first quarter of 2019, we reported net loss attributable to common stock holders $48.7 million or $0.49 per diluted share. For the quarter, we reported AFFO per diluted share of $02.6 adjusted EBITDAre totaled $100.5 million for the quarter. At the end of the first quarter, we had $4.2 billion of mortgage loans with a blended average interest rate of 5.7%. Our loans were 9% fixed rate and 91% floating rate. All of our loans are non-recourse and we have a well laddered maturity schedule.

Interest rate caps are in place for virtually all of our floating rate loans and including the market value of our equity investment in Ashford Inc., we ended the quarter with net working capital of $359 million. As of March 31, 2019 our portfolio consisted of 121 hotels with 25,552 net rooms. Our share count at quarter end stood at $124 million fully diluted share outstanding which is comprised of 102.2 million shares of common stock and 21.9 million OP units.

With regard to dividends, the Board of Directors declared a first quarter 2019 cash dividend of $0.12 per share or $0.48 on an annualized basis. Based on yesterday's stock price this represents an 8.5% dividend yield among the highest in the hotel REIT space. On the capital market's front during the quarter, we refinanced our Aareal Capital, Nashville Princeton mortgage loan with an existing outstanding balance totaling approximately $178 million and a final maturity date in June, 2022.

The new loan totals $240 million and has two-year initial term with five, one-year extension options subject to the satisfaction of certain conditions. The loan is interest only and provides for a floating interest rate of LIBOR plus 2.75%. The loan remains secured by the same two hotels, the Renaissance and National Tennessee and the Westin Princeton and Princeton New Jersey.

At January, in connection with the acquisition of the Embassy Suites Manhattan, we entered into $145 million non-recourse mortgage loan. The loan has a three-year initial term with two, one-year extension options subject to the satisfaction of certain conditions. The loan is interest only, with the rate of LIBOR plus 3.9%. In connection with the closing of the Hilton Santa Cruz/Scotts Valley acquisition we assumed an assumed an existing non-recourse mortgage with a balance of approximately $25.3 million. The loan bears interest at a fixed rate of 4.7% and matures at March, 2025.

This concludes our financial review and I would now like to turn over to Jeremy to discuss our asset management activities for the quarter.

Jeremy Welter

Thank you, Deric. Comparable RevPAR for our portfolio grew 1.9% during the first quarter of 2019. Comparable RevPAR for those assets not under renovation grew 2.7%. this growth represents 180 basis point gain and a 40 basis point gain relative to the upper upscale class nationally and the total United States respectively.

During the first quarter comparable hotel EBITDA grew $2.3 million or 2.1%. The government shutdown at the beginning of the quarter impact January and February leading to approximately $1.3 million less than revenue. Eastern occurred later in April, 2019 benefited March this year relative to 2018. In January we acquired the recently opened 310 room Embassy Suites, New York, Midtown Manhattan.

Following it's opening in January 2018. The hotel's performances continue to ramp due in large part to its proximity to the Hudson New York's redevelopment, Times Square, Penn Station and Brighton Park. It is also the only Embassy Suites hotel in Manhattan. As I've highlighted in the past, our property manager Remington has a strong track record of driving our results, following our acquisition of both independent and franchised hotels and this hotel has not been an exception as comparable RevPAR during the first quarter grew 43.4%. Its RevPAR growth represents 5,050 basis points and 4,920 basis points growth relative to its market and hotel's competitor respectively.

We're excited about the outlook for this hotel and we believe the significant upside remains at this property. One of the first initiatives is to convert 40 king rooms to double queen rooms during the third quarter in order to capitalize on the premium pricing of multi-bed hotel rooms in Manhattan. During 2019, we will continue to invest in our portfolio to maintain competitiveness. In total, we estimate spending approximately $135 million to $145 million in capital expenditures during the year. Assessment is down significantly from what we spent in 2018.

We've completed guest room renovation at several hotels including the Embassy Suites Crystal City, Hyatt Regency Coral Gables along with a few select properties. We've also completed lobby renovation at the Marriott Crystal Gateway. We continue to work on guest room renovation at the Marriott DFW Airport and a number of other hotels. We're continuously identifying opportunities to create value throughout the portfolio, to that end the first phase of the Renaissance Nashville redevelopment is complete and the second phase is underway. Which will include the build out of additional meeting space?

Furthermore, we've identified accretive opportunities to add additional keys within our portfolio. We'll be adding four keys at the Hilton Boston Back Bay and have added two keys to the Embassy Suites Crystal City and one key to the Hyatt Regency Coral Gables. Throughout 2018, I've discussed the impact of renovations on our portfolio. I'm now excited to discuss the positive benefit experienced from some of these transformational renovations and how they position us for long-term success.

I'd like to turn to our largest DC area hotel, the Marriott Gateway in Arlington, Virginia. During the first quarter, we completed the final stages of major renovation. Completing the refurbishment of the remaining portions of the lobby. They also finished painting the exterior of the building and adding pavers in lining to the driveway in [indiscernible]. About the ongoing renovation hotel EBITDA flowed through during the first quarter was a robust 66%. Major renovation at one of our largest hotels positions us well going forward especially considering Amazon HQ2's increased market presence is expected to significantly add overall room demand in this market.

In addition to our two acquisitions during the first quarter, the Embassy Suites Midtown New York and Hilton Scotts Valley, Santa Cruz have won the highlight the outstanding performance over fourth quarter acquisition, the La Posada Santa Fe which is a hotel in [indiscernible] portfolio. During the first quarter, our initial quarter of ownership comparable RevPAR grew 22% driven by 18.1% occupancy growth. This RevPAR growth represents 1,890 basis point growth relative to the Santa Fe upscale and above submarket.

Through the first five months of ownership comparable RevPAR at La Posada Santa Fe has grown 16.1%. We're now only able to realize strong revenue growth, but we also saw a 7 percentage point increase in hotel EBITDA margin with 51% hotel EBITDA flow through. We're excited about the early successes of our recent acquisitions and the future of our portfolio. That concludes the prepared remarks and we will now open the call for Q&A.

Question-and-Answer Session

Operator

[Operator Instructions] and we'll go first to Bryan Maher with B. Riley FBR.

Bryan Maher

Couple of questions from me and maybe this one's for Jeremy. On the CapEx that you talked about the $135 million to $145 million, how much of that would you consider - versus project?

Jeremy Welter

Consider what?

Bryan Maher

Maintenance CapEx versus project or ROI project type CapEx?

Jeremy Welter

Most of it - predominantly it's going to be maintenance CapEx. It's just part of the business that we're in, we don't really break that out. We can probably start doing that on a go forward basis, but most of its going to be substantially overwhelming maintenance CapEx.

Bryan Maher

Okay and then, other than Nashville. Are there any other big projects kind of on the horizon maybe that you would start in late 2019 or in 2020?

Jeremy Welter

Not anything like Nashville where we have meeting space out for so long. We've got some renovations we've disclosed and that we'd start in the fourth quarter on the renovation schedule that we provide and those are mostly some guestroom renovations, W Minneapolis hotel. We do have meeting space worked over to do at Ritz Carlton in Atlanta. There won't be anything near what we did at Nashville, that's just a refresh. Most of it is - it's mainly just refresh CapEx.

Bryan Maher

And then when we look at our RevPAR outperformance in the first quarter of 2019 over 2018, how much of that would you attribute to renovations that were completed in 2018, that are now not going on in 2019. Is it 50 bps, is it 25 bps. What do you think that outperformance measurement it?

Jeremy Welter

I haven't gone back to actually calculate that. But if I were to guess, I would say somewhere between 50 to 100 basis points.

Bryan Maher

And then maybe for Douglas, when you're looking at the acquisition pipeline and ERFP. First of all, have you started any further discussions with Inc. [ph] to grow the size of ERFP from $50 million to $100 million. And then secondarily, kind of how deep is your pipeline now versus historically and historically being over like the last year or two.

Douglas Kessler

Thanks Bryan. So you highlight an interesting point which is the ERP agreement contemplates potential increase in size of the ERP to $100 million by mutual agreement. We've spent 80%, we're committed to 80% of the ERP. So we still have a little bit ways to go and I think, we'll cross that bridge when we get there as we continue to seek out accretive acquisitions for the platform. So little too early to have any discussion around you first quarter. As for your second question about transaction pipeline, I'd say that overall for the industry we're seeing a decent flow of single assets. In fact the data which showed that volume was up about 1.5% for single assets but there are lot fewer portfolios out there in the market over the same time a quarter ago, it's down substantially almost 75% and yet you know the total dollar volume this year over same quarter last year for the whole industry is down about 31% mainly due to the lack of portfolio activity.

And I think all this is directionally consistent with our specific focus on the upper upscale full service segment. I think it's worth noting that the average cap rates I'd say for the type of assets we're seeking are down about 67 basis points. So showing at least from the trades that have happened pretty strong price competitiveness and that, the per key prices have also traded up mid to high-teen percentages. So it's a strong market in terms of pricing movement.

I think one comment I'd say is there seems to be a little bit more upsides to the increased in pricing above BOV's [ph] for the higher quality assets and maybe a little bit more aggressive BOV's [ph] and what's actually coming out the less demanded assets by buyers. But overall I'd say prices as indicated by the data I share with you are pretty firm. I think people are being a little bit more conservative on underwriting but the [indiscernible] recessionary forecast and I think deals in general are taking a little bit longer to close in this competitive bidding transaction market where bids maybe go into multiple round.

So for us, I think I'd conclude by just saying that. We've at great success with the four deals we've bought over the past year. The ERP has worked I think substantially to our benefit to increase shareholder value. It gives us a competitive advantage. We're going to continue to remain disciplined. We're underwriting deals and the objective is to make good deals, great deals.

Bryan Maher

Thanks. That's all from me.

Operator

And we'll go next to Chris Woronka with Deutsche Bank.

Chris Woronka

One ask, a lot of your peers have talked about it seems benefits related to the Marriott and Starwood and they're coming through a more meaningful way and I know some of that relates to managed hotel, which wouldn't apply as much to you guys. But even on the franchise side things like OTA fees. Are you seeing those come through meaningful this year?

Jeremy Welter

Yes, we are, we had really good flow throughs - Marriott managed portfolio. They definitely stood out in the quarter and is a pretty good mix of lot of reasons why that occurred. Some of it is because of we hedged [indiscernible] performance in the prior year last year in some of those hotels, given the disruption of the integration. But we're certainly seeing a lot of benefits this year on the cost side.

On the revenue side, we're also gaining share. We're gaining quite a bit of share across portfolio. We had our overall portfolio if you take out Embassy Suites Manhattan, which is ramping up it was 180 basis point growth in market share versus our direct competitive sets, which is I think fantastic for portfolio of this size, for the first quarter. And I would say that the Marriott managed portfolio definitely stood out to be well north of two to 250 basis points and so they were the outperformer for us in the first quarter.

Chris Woronka

Okay, great. That's helpful. And then I just want to come back to the Embassy Suites New York. Congrats on the early success there. Does that make you - do you guys have a maybe a different view of the market. I know it's a very specific asset and the reason you guys bought it. But we've heard some mixed things from others about New York. Do you guys have a different view of something else similar came up, would you be willing to go deeper in the market?

Douglas Kessler

Well let me just tell you, why we bought this asset? You're right, this was a unique opportunity given brand new fee simple, very efficient box. The only brand of this type in the market, opportunity for Remington to take over management. We thought that it would ramp up well which the early performance indicators clearly highlight that and as for our macro view on New York. I would say that, we're extremely pleased with this acquisition and we're looking forward to its continued performance and I think a lot of that has to do with, what we start to see in New York.

Now granted the first quarter 2019 was a bit soft, but our property was up 43% in terms of RevPAR and our index was up 46%. So when I look at that, I'd say this is clearly a great assets in its specific market and so we're excited about that. When we look at what people were most concerned about in New York, it tended to be the supply pipeline and I think sometime that supply pipeline has been a little bit overstated. I think things are taking longer to get developed in New York. But nevertheless the pipeline was fairly strong with I'd say about 9.1% new supply in the previous 13 to 24 months, but that's tapered off substantially and when we look at the past six months our data shows there was only about 5.2%.

And according to Smith Travel Research, New York finished 2018 with 3.4% RevPAR and the forecast is and that was in 2018 and the forecast was for continued positive RevPAR growth in 2019. So I think that's a pretty good set up in one of the nation's hottest hotel market with a brand new asset of this type of quality and that's why we made the investment we made and plus with the benefit of the ERP money, it just made this transaction even better.

As for other opportunities in New York, it took us 16 years to find this asset that - perfectly with what we were looking for. I can't really comment on what we might find in the future in New York, but we're pretty patient and disciplined when it comes to thinking about investment activity in Manhattan.

Jeremy Welter

I would add that the ramp has exceeded our expectations in terms of transition, it takes about 30 to 45 days. But just within two months we basically achieved our full year underwriting for RevPAR index penetration which we mentioned in the prepared remarks which is fantastic and one of the things that we really liked, is that Remington does a fantastic job with the Embassy Suites brand. So we think there's a lot of upside for us, for this particular asset.

Chris Woronka

Okay great and just want to ask on the select-service. I think we still see a pretty big disconnect in public valuations if not widening. Have your guys calculus changed any maybe since last quarter in terms of being closer to potentially selling some of the select-serv you've talked about in the past?

Jeremy Welter

I think you're right in terms of the valuation. I think there's a pretty substantial disconnect between private and public market values. There's a definitely a private market appetite for these types of assets. When it comes to sales I'd say our perspective on sales is more holistic. It's not anything other than, we're going to be opportunistic when it comes to sales with a focus on trying to upgrade the portfolio, mitigating low ROI CapEx assets, removing lower RevPAR assets and just having an overall positive impact on leverage and cash flow within our portfolio. And to the extent we sell anything it's not just a focus on select-service hotels. It could be other assets in our portfolio and I think if you look at the history of what we sold over the past three years. It really has been a mix of both full service and select-service hotels at cap rates that were materially better than where our portfolio overall traded. Yet if I recall correctly, I think the average RevPAR on those hotels was around $80. So I think significantly lower RevPAR and maybe a RevPAR with number could be little bit off. But it was materially lower RevPAR than our overall portfolio.

So I think in indication of the value of the assets that we have in our portfolio and I think the fact, it indicates our ability to be very opportunistic in selling the right type of assets, at the right time to the right buyers in getting the maximum proceeds that we can from those assets. So I think our track record speaks for itself in terms of being disciplined and thoughtful in regards to looking at potential dispositions within our portfolio. So I think it goes beyond just your question on select-service assets.

Chris Woronka

Okay, very good. Thanks guys.

Operator

Our next question comes from Tyler Batory with Janney Capital Markets.

Tyler Batory

I just wanted to follow up on one of the earlier questions. It's about your RevPAR outperformance in the quarter. How did results come in versus your internal budgets and expectations? And are there any notable trends with respect to demand that are worth highlighting? Specifically any differences as far as what you're seeing on leisure versus corporate travel.

Jeremy Welter

Yes, this is Jeremy I'll take that. I think it exceeded what we thought what it's was going to be for the quarter. No real trend in terms of substantial changes in demand. It's a little bit difficult because we did have a big change of mix in the quarter because we had our main space back at our largest group of hotel which is Nashville, Renaissance we had a lot more group business in the quarter than what we did prior year. But when you look at it, we were definitely impacted by the government shutdowns, so that didn't occur [indiscernible] we have better RevPAR for the quarter. And then March was fairly solid for us as well.

So in terms of other trends, one thing that I do want to point out in terms of just kind of distribution is that, we're seeing really for the first time in quite some time. That we're having declines in our OTA channels which I think is very positive. We're seeing growth in our direct channels, our brand channels and direct website channel. So we're positive about that, but there's not really any other trends in terms of major change in demand or mix that we've been providing inside at this time.

Tyler Batory

Okay great and then how about on the cost front? Any change to your expectations for labor expenses or any other costs?

Jeremy Welter

No. I don't think. The one thing is, insurance is continuously difficult for us. We're in the market right now pricing our program and that renewal will hit in June of this year. We had a decent size increase last year that provided some headwinds going into this year. But there's been a lot of issues not necessarily with our portfolio or our assets, but just the market in general and capacity in the insurance market, which has been challenging. So that's something I'm a little concerned about as we kind of go into the renewal. But that's not going to be a huge overall cost for us, but it's probably going to be potentially a decent percentage increase.

And then labor continues to be a challenge for us. Right now our franchised assets, we've pulled the data and there are labor and benefits combined were up 3.8% we're projecting for the year, which is certainly higher than what we like to see.

Douglas Kessler

Just to add onto that, just from a macro perspective. I'd say that, our comparable EBITDA margins were down 25 bps. Which we feel generally pretty good about in light some of the headwinds that Jeremy highlighted the insurance and the labor cost, that was against the backdrop of 2.9% increase in our hotel revenue of which, there was a slightly more disproportionate amount related to food and beverage which obviously has lower margins associated with that. So I'd say that, everyone is in the same boat here with respect to labor cost and I think everyone's probably experiencing the cyclical shift and insurance cost given what happened across the country over the past year and so, I think we're doing a very good job of holding margins despite some of those headwinds.

Tyler Batory

Okay, great. That's all from me. Thank you.

Operator

[Operator Instructions] and we'll go next to Amanda [indiscernible] with Baird.

Unidentified Analyst

I wanted to start with a higher level question. Can you talk about how the return profile CapEx spending has maybe changed over the past year? And then, how do you think about the relative attractiveness of ROI projects today versus some of the returns you're seeing in the acquisition market?

Jeremy Welter

Yes, this is Jeremy I'll take that. We continue to mine our hotels for opportunities and what we're finding as we - we're doing new rooms renovations we're finding opportunities to add a few keys here and there. We've been moving some of our lounges down to the main level which is lot of [indiscernible] keys and some other opportunities as well. I mentioned we just recently bought MC Suites Manhattan and they are - there's big opportunity to add double queens which is a premium in New York and so that's something that we're going to do as well. Most of the other ROI projects we've done, we've already implemented in the assets that we've owned. We've been very, very creative on how we approach that and what we've done.

So I don't see a ton of value added CapEx that we see in the horizon within the Trust portfolio. But as it relates to just CapEx spent in general, I do think that we probably define ROI a little bit different than our peers. I think our peers take a much loser definition what is truly ROI versus what we view as brand standards and continued upgraded that we have to do to stay competitive to be in the business. Whether it's taking tubs out and putting showers in, yes that's a nice return on investment that guest is happier. I don't see that we're going to get a lot of return on that incremental spend. So a lot of what we see that we're doing is just to stay competitive, to be very competitive.

I think we've done a great job at that. If you look over the last with the exception of last year to previous four years, we gained market share. So four out of five years, we gained market share. We gained a tremendous amount of market share in the first quarter which I'm very, very proud of and so we're on track hopefully to gain five in the last six years, which I think is amazing, if we accomplish that and I think that's a reflection of how we approach pretty prudent and diligent CapEx spend within our portfolio.

Unidentified Analyst

And that's helpful. And then just a housekeeping question, maybe for Deric. Can you talk about how the Embassy Suites New York impacted the overall portfolio during the quarter both in terms of RevPAR growth margin and then absolute EBITDA contribution, just given up that hotel was ramping.

Deric Eubanks

Yes, sure. Amanda thanks, this is Deric. So as we mentioned the total portfolio had 1.9% comparable RevPAR growth. If you back out New York the portfolio would have been 1.5% which we think is still attractive result there. And in terms of margins, total portfolio EBITDA margin, comparable EBITDA margin was down 25 basis points. If you pull out New York it would have been down 31 basis points, so it impacted margins there by six basis points. An then in terms of impact overall EBITDA growth total portfolio comparable with hotel EBITDA growth was up $2.3 million and if you pull out New York, it would have been up $1.5 million. So still attractive results for the overall portfolio even when you pull out New York which obviously had a great quarter.

Jeremy Welter

And I'll add on just market share in general for the first quarter. I already mentioned that without the Embassy Suites, Manhattan our market share we gained 180 basis points versus our competitive sets. If you include the Embassy Suites on the entire portfolio that gives up 30 basis points to 210 basis points market share gains.

Unidentified Analyst

Okay, thanks for taking my question.

Operator

We'll go next to Robin Farley with UBS.

Unidentified Analyst

This is Jake Westfall [ph] on for Robin. Just quick question, can you give an update on your supply outlook and specifically around the flag service portfolio, when industry supply forecast be a little higher going forward.

Douglas Kessler

Sure it's Douglas and then I'll have Jeremy make a few comments. I think when you look at our major markets we've got a pretty good supply situation. Obviously the industry overall is tapering off on the supply pipeline. But most of what's coming in, as I think you're alluding to in the select-service segment. When you look at our major markets in terms of let's say revenue, largest market by revenue? In DC we're seeing 1.2% to 1.3% a new supply growth over the next couple of years, Atlanta next at just over 2% supply growth. The San Jose Santa Cruz market next in line would be less than 1.5% supply growth. Boston in the 3% range, Nashville one of our larger markets has had new supply coming in but it's also one of the more dynamic markets with lots of demand coming in as well and so that market is somewhat continue to defy gravity in terms of RevPAR performance.

So overall I think one of the benefits we have with our portfolio is, I do believe we are one of the most geographically diverse footprints and as a result of that, we get sort of the ebb and flow of supply and new demand coming in. and so we're very happy with our footprint in light of what seems to be a market that overall it's showing a reduction or at least a cresting of supply in the near term.

Jeremy Welter

I didn't really had anything more to add than what Doug said.

Unidentified Analyst

Okay and then maybe could you just talk about the strong F&B performance. What were some of the drivers in the quarter? And kind of what trends are you seeing and expect going forward?

Jeremy Welter

Yes we had a increasing group business for the quarter and a lot of that actually is because of Nashville, Renaissance if we broke out that property. I believe they were up 30% in total revenue for the quarter and so that was a big impact.

Deric Eubanks

Yes, but half of the dollar growth in F&B revenue was a result of the Renaissance, Nashville having its meeting space back.

Unidentified Analyst

Great, thank you guys.

Operator

And as we have no further questions. I'd like to turn the conference back over to management for any additional or closing remarks.

Douglas Kessler

Thank you for joining today's call and we look forward to speaking with you again next quarter as well as seeing you in New York at NAREIT.

Operator

And ladies and gentlemen, that does conclude today's conference. Thank you for your participation. You may now disconnect.