Welcome to the RLJ Lodging Trust First Quarter 2023 Earnings Call. As a reminder, all participants are in a listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. I would now like to turn the call over to Nikhil Bhalla, RLJ's Senior Vice President, Finance and Treasurer. Please go ahead.
Thank you, operator. Good morning, and welcome to RLJ Lodging Trust 2023 First Quarter Earnings Call. On today's call, Leslie Hale, our President and Chief Executive Officer, will discuss key highlights for the quarter. Sean Mahoney, our Executive Vice President and Chief Financial Officer, will discuss the company's financial results. Tom Bardenett, our Chief Operating Officer, will be available for Q&A. Forward-looking statements made on this call are subject to numerous risks and uncertainties that may lead the company's actual results to differ materially from what had been communicated. Factors that may impact the results of the company can be found in the company's 10-Q and other reports filed with the SEC. The company undertakes no obligation to update forward-looking statements. Also, as we discuss certain non-GAAP measures, it may be helpful to review the reconciliations to GAAP located in our press release.
Finally, please refer to the schedule of supplemental information which was posted to our website last night, which includes the former operating results for our current hotel portfolio. I will now turn the call over to Leslie.
Thanks, Nikhil. Good morning, everyone, thank you for joining us today. We are encouraged that the positive momentum in lodging fundamentals continued throughout the first quarter as RevPAR for the industry sequentially improved each month on both an absolute basis and relative to 2019. As we expected, first quarter RevPAR in urban markets outpaced the industry relative to last year and achieved a significant milestone of reaching 2019 levels for the first time post the pandemic. Against this constructive backdrop, we achieved strong first quarter operating results that exceeded our expectations, made tangible progress on our 2023 conversions, continued the ramp of our 2022 conversions, extended maturities for $425 million of debt, opportunistically repurchased $40 million of stock, and increased our quarterly dividend by 60%.
Our strong performance during the first quarter underscores the overall benefits of our urban-centric portfolio and also demonstrates the optionality that our balance sheet provides to accretively deploy capital to enhance shareholder returns. Turning to our operating performance. During the first quarter, the ongoing recovery in our urban markets led our RevPAR to increase by 27% over last year and achieve 95% of 2019, representing an improvement of 100 basis points from the fourth quarter. Notably, our RevPAR growth not only benefited from increased demand, yielding a 12% year-over-year increase in occupancy, but also achieved incremental ADR lift as continued pricing power led our ADR to grow more than 13% above last year. Demand increased throughout the first quarter, which led our operating results to accelerate each month, with March RevPAR reaching 99% of 2019.
We are encouraged to see this momentum continue into April. Our urban hotels, which represent two-thirds of our EBITDA, generated the highest RevPAR growth within our portfolio during the first quarter. These results outperformed our expectations, with RevPAR increasing by nearly 37% over last year and achieving 96% of 2019 for the quarter, with March achieving 101%. Demand growth was broad-based across all of our urban markets, including Southern California, despite the impact of severe weather during the quarter. Our urban portfolio benefited from continued improvement in business travel, strong group demand, healthy leisure and rising international travel. This increased demand drove a 17% year-over-year increase in ADR during the first quarter for our urban portfolio, which continues to have significant room for growth.
Strong performance in our urban hotels underscores our conviction that our portfolio is set up to outperform on a relative basis given the outsized growth expectations for urban markets. With respect to segmentation, we remain encouraged by the continued recovery of business transient demand. We are seeing corporate demand broaden to include industries such as aerospace, automotive, finance, insurance, healthcare, and consulting. This is reflected in our first quarter business transient room nights, which improved by 10 points from the fourth quarter to 85% relative to 2019. We saw sequential improvement throughout the quarter with our special corporate revenues, which achieved 75% of 2019 levels in March, the highest level post the pandemic. Positive momentum in business transient can also be seen in our weekday RevPAR, which achieved 93% of 2019 during March.
Our group segment continues to exceed our expectations. During the first quarter, our group revenues achieved nearly 100% of 2019 levels. Group revenues were driven by ADR growth as strong demand from social groups and improving corporate groups allowed us to achieve an 11% increase in ADR over 2019, the highest premium to date. Current year group bookings were robust during the first quarter as we booked approximately $48 million in group revenues for 2023, representing more than half of the total in the year group revenues booked during all of last year. This enabled us to drive higher group rates across our portfolio, including at our regional powerhouses such as Louisville and Tampa. Given the appeal of our property types to small groups, our hotels are able to book more self-contained groups rather than rely largely on citywide.
This has allowed our in the year for the year group revenue pace to increase to 95% of 2019 levels currently, representing a 13% improvement from the beginning of the year. Despite the normalization of demand patterns, leisure demand remained elevated across our portfolio, which further strengthened our leisure ADR to 125% of 2019, representing a new high watermark. The strength in leisure demand in our portfolio was bolstered by the continued recovery of urban leisure, which is benefiting from hybrid work flexibility. Our urban lifestyle properties, which are located in seven-day-a-week demand submarkets with multiple demand generators, are especially well positioned to benefit from this growth.
With our recently renovated resort assets, including our Zachari Dunes on Mandalay Beach, our resort properties achieved 120% of 2019 ADR, which improved sequentially from the fourth quarter. We believe that our leisure ADR will be more sustainable on a relative basis going forward, given our concentration in urban lifestyle hotels, which are well positioned to capture urban leisure demand from experiential travelers looking to combine work and play. The positive momentum we achieved during the first quarter led our hotel EBITDA to increase by 44% over last year and achieve 87% of 2019 levels. As we expected, our lean operating model allowed us to achieve efficiencies to mitigate some of the inflationary pressures on hotel operating costs, which led our hotel EBITDA margins to increase by more than 280 basis points from the prior year.
Our strong operating performance and the overall margin profile of our portfolio enabled us to generate significant free cash flow during a seasonally slower quarter. Moving on to capital allocation. We continue to make progress on our internal growth opportunities. Our 2022 conversions are on pace to meaningfully outperform our overall underwriting. This year, we expect the EBITDA generated by these three conversions to accelerate throughout the year and exceed their 2019 EBITDA by over 25%. We are also making progress on our two new conversions. The comprehensive renovation and repositioning of our Houston Medical Center hotel is expected to begin during the second quarter, which will position the hotel to capture incremental rate through its affiliation with Hilton as a DoubleTree. We are pleased to announce that our Garden District hotel in New Orleans recently joined Marriott's Tribute Portfolio as Hotel Tonnelle.
We expect the hotel to immediately benefit from joining the powerful Marriott Bonvoy system, with additional ADR lift to come after we complete the repositioning and renovation scheduled for later this year. These conversions underscore the significant embedded value in our portfolio and our ability to unlock incremental EBITDA. We expect these conversions to be highly accretive and further enhance our portfolio quality. Additionally, we have one of the strongest balance sheets among our publicly traded peers, which allows us to pursue multiple channels of growth. We have demonstrated the optionality that our balance sheet provides by pulling multiple levers, such as deploying capital towards our new conversions and opportunistically repurchasing shares. Far this year, we have redeployed free cash flow to repurchase $40 million of our shares on a leverage neutral basis at an attractive average price of $10.22 per share.
Given our strong balance sheet and free cash flow profile, we will continue to evaluate incremental share repurchases on a disciplined and leverage neutral basis. This past quarter, we also utilized multiple tools to return capital to our shareholders, which included raising our quarterly dividend by 60%. Looking ahead, while we recognize that the current macro environment is uncertain, there are a number of indicators that allow us to remain constructive for the remainder of the year. We believe that urban markets should continue to outperform the industry during the second quarter, which will benefit our portfolio as reflected on our second quarter outlook. For the full year, we continue to expect year-over-year RevPAR growth to be the strongest during the first half due to easier comps.
We also expect to achieve year-over-year growth each quarter for 2023, given that leisure performance should remain healthy against positive leisure demand dynamics. The recovery of business transient should continue throughout the year, with corporate demand broadening as we experienced in the first quarter. Group demand should continue to strengthen, especially small social and corporate groups. As previously mentioned, our group segment will benefit from the improving in the year for the year booking trends. Our confidence is bolstered by our second quarter group pace, which is nearly at 2019 levels. As international travel improves, it should drive incremental demand throughout the year, especially in gateway urban markets. Finally, the ramp of our three recently completed conversions will further bolster our performance.
We believe that these positive trends should further amplify the performance of our urban markets, allowing us to achieve RevPAR ahead of the industry. We are already seeing these trends taking shape during the second quarter. Longer term, we believe that the outlook for lodging fundamentals remains very positive given the secular changes in the nature of travel demand, which will drive strong growth. This dynamic will be especially beneficial for our portfolio, which is uniquely positioned to drive outsized EBITDA growth given our concentration in urban markets, which have significant run room for growth, given a multi-year favorable demand supply imbalance.
Our high quality diversified portfolio that benefits from seven day a week demand, the upside from our conversions and recent acquisitions, and the execution of incremental internal growth opportunities, including the completion of our next two conversions and our pipeline of future opportunities supported by our strong balance sheet. Overall, we are encouraged with our relative strong positioning. I will now turn the call over to Sean.
Thanks, Leslie. To start, our comparable numbers include our 96 hotels owned throughout the first quarter. Our reported corporate adjusted EBITDA and FFO include operating results from all sold and acquired hotels during RLJ's ownership period. We were pleased with our first quarter results, which exceeded our expectations. First quarter portfolio occupancy was 68.5%, which was 90% of 2019 levels. Average daily rate was $199, achieving 105% of 2019, and RevPAR was $136, which was 95% of 2019. First quarter ADR exceeded 2019 levels by 10% or more in a number of key urban markets, including San Diego, New York, Miami, Tampa, Washington D.C., Pittsburgh, and New Orleans.
Monthly RevPAR accelerated throughout the quarter and achieved 91%, 93%, and 99% of 2019 levels during January, February, and March, respectively. March recovered to 99% of 2019, which was the highest month of the pandemic, and was driven by a combination of occupancy at 93% of 2019 levels and ADR of 106% of 2019. Our outstanding March results were primarily driven by RevPAR exceeding 2019 in most of our urban markets, such as New York at 105%, Los Angeles at 110%, San Diego at 108%, Chicago at 111%, Washington, D.C. at 106%, Tampa at 132%, Indianapolis at 133%, and Louisville at 122%.
Our first quarter operating trends led our portfolio to achieve hotel EBITDA of $90.9 million, representing 87% of 2019 levels. Hotel EBITDA margins of 28.9% increased 283 basis points above the comparable quarter of 2022. Monthly results accelerated throughout the quarter with March hotel EBITDA at 94% of 2019 levels. The positive momentum from March continued into April, where forecasted RevPAR is approximately $156, representing a 7% increase from 2022.
April RevPAR was driven by occupancy of 75% and ADR of approximately $207, representing 91% and 108% of 2019 levels, and 100% and 107% of April 2022. Importantly, forecasted April hotel EBITDA is expected to exceed 95% of 2019 levels. Turning to the bottom line, our first quarter Adjusted EBITDA was $82.7 million and adjusted FFO per share was $0.35, both of which exceeded the high end of our guidance ranges. While demand remained strong during the first quarter, hotel operating costs continued to normalize.
Underscoring the benefits of our portfolio construct and the success of our initiative to redefine the operating cost model, total first quarter hotel operating costs were only 1% above 2019 levels, which is meaningfully below the aggregate core CPI growth rate since 2019 of approximately 16.5%. There are many factors that influence these positive results, with the most significant contributors being the successful restructuring of many of our third-party operating agreements and reductions in property taxes, both of which are expected to continue benefiting our operating costs. First quarter wages and benefits, our most significant operating costs at approximately 40% of total costs, remain below 2019 levels.
During the first quarter, our hotels continued operating with over 25% fewer FTEs than pre-COVID, which moderated 500 basis points from the fourth quarter, despite higher occupancy during the first quarter, demonstrating the flexibility of our labor model in the post-COVID environment. Our portfolio remains better positioned for the current labor environment due to the need for fewer FTEs given our lean operating model, smaller footprints, limited F&B operations, and longer length of stay. We remain active in managing our balance sheet to create additional flexibility and further lower our cost to capital, including extending $425 million of debt to 2024 and replacing $94 million of maturing term loans with the delayed draw proceeds from the term loan that we entered into in late 2022. Our balance sheet is well positioned with an undrawn corporate revolver.
Our current weighted average maturity is approximately three and a half years. 81 of our 96 hotels are unencumbered by debt. Our weighted average interest rate is at an attractive 3.98%, and 93% of debt is either fixed or hedged. Turning to liquidity. We ended the quarter with approximately $474 million of unrestricted cash, $600 million of availability on our corporate revolver, and $2.2 billion of debt. With respect to capital allocation, as Leslie said, to date in 2023, we've remained active under our $250 million share repurchase program and have repurchased approximately 3.9 million shares for $40 million at an average price of $10.22 per share, including twelve and a half million dollars repurchased so far during the second quarter.
At the end of April, our board approved a one-year, $250 million share repurchase program, which will provide us with an additional tool to take advantage of future volatility in the capital markets to repurchase shares. Turning to dividends. Given the embedded growth in our portfolio, our lean operating model, and the strength of our balance sheet, as previously announced, our board increased our quarterly common dividend to $0.08 per share starting with the first quarter. We continue to view both share repurchases and dividends as important components of the total return we seek to provide investors. The recent use of both of these capital allocation tools validates our ongoing commitment to enhancing shareholder returns.
We will continue making prudent capital allocation decisions to position our portfolio to drive results during the entire lodging cycle while monitoring the financing markets to identify additional opportunities to improve the laddering of our maturities, reduce our weighted average cost of debt, and increase our overall balance sheet flexibility. Turning to our outlook. Based on our current view, we are providing second quarter guidance that anticipates a continuation of the current operating and macroeconomic environment. For the second quarter, we expect comparable RevPAR between $155 and $159, comparable hotel EBITDA between $121 million and $130 million, corporate adjusted EBITDA between $112 million and $121 million, and adjusted FFO for diluted share between $0.51 and $0.57.
Our outlook assumes no additional acquisitions, dispositions, refinancing, or share repurchases. Please refer to the supplemental information, which includes comparable 2019 and 2022 quarterly and annual operating results for our 96 hotel portfolio. We continue to estimate RLJ capital expenditures will be in the range of $100 million-$120 million during 2023. Thank you. This concludes our prepared remarks. We will now open the line for Q&A. Operator?
Thank you. At this time, we will be conducting a question and answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing these star keys. One moment please while we pull for questions. Our first question comes from the line of Austin Wurschmidt with KeyBanc Capital Markets Inc. Please proceed with your question.
Great. Thanks, and good morning, everybody. I appreciate you guys' comments around the BT broadening across sectors, but curious if you're seeing any slowdown in velocity of the recovery in BT. Specific to your urban portfolio, how did it perform in the context of your April results?
First of all, good morning, Austin. I would say that as it relates to BT, we're not seeing a slowdown. We're seeing a grind forward, if you will. You know, we talked about, you know, in our prepared remarks that our room nights are up 10 points quarter-over-quarter. We saw sequential improvement during the quarter, where we ended the quarter at 85% of 2019 room nights. March actually ended at 92% room nights. What I would also say is that we saw sequential improvement in revenues and ended with March at 75% of total revenues for 2019.
If I drill down even further, on midweek numbers, we ended the quarter with RevPAR at 89%, which is a 100 basis point quarter-over-quarter improvement, but March ended at 93%. As I think about that moving into April, we're seeing that momentum carry forward. In fact, you know, the quarter's off to a good start. You know, April, we expect overall to be in line with March, but we saw ADR overall pick up 200 basis points relative to 19 month-over-month relative to March. Additionally, you didn't ask about group, you know, group pace is at 2019 levels for the second quarter.
What I would say about BT in the second quarter is that typically May and June are the stronger BT months in the second quarter. We would expect to build on the momentum we saw in the second half of April relative to BT. We're seeing it grind forward. We're not seeing it soften, Austin.
I'm curious what the latest trends and sort of pace update across your Northern California submarkets are, you know, for various demand segments. Do you continue to see a recovery, you know, in any specific submarkets that are outperforming?
Good morning, Austin, it's Tom. In Northern California, as you know, our footprint, we have a couple in CBD, couple out in Emeryville, over at the airport, SFO in Burlingame, and then out in Silicon Valley. What we're finding is, we are seeing significant project business and new hires that are coming in to our Silicon Valley hotels. Accounts like Tesla, Apple, accounts that, you know, Leslie referred to in her BT are also, you know, still hiring some folks that are on the intern side, and we're seeing that type of business come in. We just booked some short-term group business with Micron, for instance. It's encouraging what's happening out in Silicon Valley and starting to see that is a ramp more in Q2 and Q3 than Q1.
In Northern California CBD, obviously JPMorgan really kind of led the charge out of the gate in January. It was one of the best events where we were going to see great attendance there. In the back half of Northern California, it's better comps for Q3 and Q4, where we know that the citywides are double the amount of 2022, even though they're still chasing 2019. We feel like there's gonna be compression because of the amount of attendance that's expected in, let's say, 16 out of the 33 citywides, there's gonna be pretty significant attendance on the back half of this year, which should be encouraging because that type of compression helps Emeryville and South San Francisco when citywides come into San Francisco.
No, that's helpful. Thanks, Tom. Thanks, Leslie.
Our next question comes from the line of Tyler Batory with Oppenheimer. Please proceed with your question.
Hey, good morning. Thank you. questions on the guidance. I'm just interested when you look at the range you provided for RevPAR in Q2, you know, are you thinking that's more occupancy driven, maybe more rate driven, maybe more 50/50? I mean, certainly the rate growth in Q1 was very strong. Sounds like April was strong as well. Just interested what you're expecting for the balance of Q2.
Sure. Tyler, as you mentioned, sort of our split between rate and occ was about 50/50 for the first quarter. I would say that in general, for the second quarter, we're looking at about two-thirds rate versus occ, but in April, it was largely rate. You know, we just generally believe that there's still ability to push you know, overall pricing power.
Okay. Okay, perfect. In terms of the capital allocation, you know, nice to see the repurchase. I mean, how do you view that option versus some of the other opportunities that might be out there? You know, you bought back stock on a leverage neutral basis. I mean, is that perhaps a governor as you think about applying more capital towards buybacks in the future? You know, the average price was kind of about where the stock is right now. Should we expect you to continue to be active in the market at current levels?
I would sort of helicopter overall and just say that, you know, you obviously saw that we were very active across a number of fronts, Tyler, and that we've consistently demonstrated, you know, a thoughtful and disciplined approach to leveraging the optionality that our balance sheet provides. Given the liquidity we have, we can pull more than one trigger. We've done that for the last several quarters here. As you mentioned, we were active on the buyback side. We did utilize free cash flow in order to buy the shares at a leverage neutral basis, which is something that's important to us.
If you look at our margin profile and our free cash flow generation, you know, that's something that we're gonna be able to continue to leverage as we go forward. We continue to obviously invest in our portfolio. We launched the two new conversions, which are already performing ahead of our expectations even without the capital that we're gonna put in later this year. We increased our dividend as well, and we continue to cultivate a pipeline of potential acquisitions, but recognizing that buybacks today remain the most attractive and accretive deployment of capital today. We'll continue to monitor that.
You know, our general approach is to have a view on where we think fundamentals and, you know, have a view on macro perspective as well, because where you think that's headed also impacts your perspective on, you know, sort of volume and complexity around, you know, buybacks. I think we've been thoughtful. We're gonna continue to be thoughtful, but we do acknowledge that buybacks remain attractive.
Okay, great. I appreciate that detail. That's all for me. Thank you.
Our next question comes from the line of Michael Bellisario with Baird. Please proceed with your question.
Thank you. Good morning, everyone.
Morning.
First question for you. You mentioned improvement in headcount, lower FTEs. I mean, how much of a driver of 1Q's outperformance on the EBITDA line was that? Maybe, how sustainable do you think that better run rate is for the remainder of the year? Does that change your earnings outlook at all, or at least your internal earnings outlook for the remainder of 2023?
Yeah, Mike, this is Sean. I think on the FTEs, you know, what we saw for the benefit of sort of our footprint is despite occupancy going up quarter-over-quarter, we were able to, you know, to flex, you know, the FTEs in light of sort of where, you know, the demand was and sort of take advantage of that this quarter. I think, you know, our long-term approach to where we think FTEs are gonna land has not changed. We think that's in the low to mid 80% of 2019 levels. We think that the ramp back to that is gonna be influenced by occupancy rebuilding.
As occupancy rebuilds, we would expect FTEs to normalize, but we think that the opportunity there is still at the 80%-85% of 2019 levels. Our view has not changed on that for the year. From a margin perspective on sort of how, you know, labor is 40% of our total operating costs, labor is a big driver of our margins. What we said at the beginning of the year, you know, our full year expectations were for margins to grow year-over-year, which they did in the first quarter by over 280 basis points. Our expectations are for that to continue, you know, for the full year.
Mike, I would just sort of book in on to Sean's comments that our guidance reflects ramp back to what we think is a normalized, you know, FTE level.
Got it. It sort of sounds like the improvement in 1Q is maybe either a little bit more temporary or the improvement that you might see is a little bit more of a 2023 impact because the long run, whether that's 2024 or 2025 is unchanged. Is that fair takeaway there?
Yeah, I would say that, you know, we are very aggressive on the asset management side. We spend a lot of time making sure that our management companies do not let costs get ahead of the top line. Coming into the year, clearly everybody had a perspective around possible macro headwinds, and so we were pretty cautious on the FTE side. I think what you're seeing is that we didn't fill some of those spots, and so it's a temporary transitory pick up on the first quarter on FTEs. What I would say, though, is it does demonstrate our model and ability to flex on the FTE side.
It goes back to the lean operating model from a standpoint of our ability to cluster, our ability to have efficiencies because of the size of our box and the average length of stay. What I think it should do, Mike, is give you confidence that we can flex when we need to, given the type of model that we have.
Got it. That's helpful. Then just one more for Sean. Where does net leverage stand today and sort of what's the comfort level or the comfortable range that you wanna operate at for the remainder of the year based on your outlook?
Sure. Today, we're in the high fours on a trailing four-quarter basis on leverage. We would expect that to go down this year, roughly half a turn as our EBITDA continues to grow over 2022. For the overall cycle, we continue to believe that below 4x net debt EBITDA is the appropriate level. As a reminder, you know, we entered COVID with leverage in the low twos. I think we were 3.2 or 3.3. We would expect to get back below 4x , you know, sometime, you know, in the either first or second quarter next year, depending on the trajectory based on our internal models.
Thank you. That's all for me.
Our next question comes from the line of Chris Darling with Green Street. Please proceed with your question.
Thanks. Good morning. Leslie, you discussed the desire to maintain some level of leverage neutrality in terms of share repurchases. I wonder how you're thinking about selective dispositions in that context. I understand, you know, it's not a great environment to maximize value, but in theory, that, you know, provides incremental capital to take advantage of that of that option. Any thoughts on any of those competing ideas?
Well, thanks for the question. I would say in general, given the backdrop that we face today in the debt capital markets, that it's not an optimal market to be selling assets into. Given the fact that, you know, we do have significant liquidity on our balance sheet, you know, we can project forward in terms of what we think our free cash flow will be and offset that, you know, with utilizing cash today and then putting it back when we have free cash flow that's generated. I would think about it from a timing issue as opposed to have needing to sell assets in order to stay leverage neutral.
All right. Fair enough. That's helpful. Maybe one more. It might be for Tom, but if I look at your recent presentation, you lay out the pipeline of, you know, future conversion opportunities, along with, I think about five to seven of what you're calling special situations. Just hoping you could speak to those special situations, the types of ROI projects, that you're envisioning over time there.
Sure. This is Leslie. I'm gonna jump in on this question. I think that what those unique opportunities are is where you have an asset and the size of the lot size allows you to look at not only a hospitality asset, but maybe also doing a multi-use site. These are situations where you can look at developing multifamily alongside a hotel. It's not necessarily something that, you know, we would execute on our own, but it's an opportunity where we think there's incremental value for, you know, for RLJ embedded in that asset, given where it's located.
Got it. I appreciate the time. Thank you.
Our next question comes from the line of Anthony Powell with Barclays. Please proceed with your question.
Hi, good morning. Just one for me on the balance sheet. I know you extended the mortgage loans and the term loan into next year, but as you think about refinancing those, most of your peers seem to be paying off mortgages. Is that something that you would consider or, what do you think you could get on a mortgage loan currently? What rate?
Yeah, thanks, Anthony. You know, mortgage debt today, we have mortgage debt on, sorry, 15 of our 96 hotels. It represents less than 10% of our total asset value. We're very comfortable, just from a standpoint of having diverse debt sources, having, you know, anywhere from, you know, up to maybe 15% of our total debt as secured. We think that's appropriate. I think for the loans that we have secured today, you know, they are loans that are, you know, anywhere on. And I'm gonna use 2023 numbers here, you know, kind of a mid-teens debt yield and north of 2x coverage on each one of those loans. They're relatively low LTV loans.
Which is why they're priced attractively. We think, you know, that's a strategy when we think about our secured that, you know, as we refinance, you know, we would probably continue to maintain sort of not pushing individual leverage on those individual loans, but you know, trying to make sure it's attractive from a pricing perspective. You know, the market today, you know, continues to be, you know, like all lending choppy on secured debt. You know, as we talk to secured lenders, we're obviously in a very good position because of our balance sheet and because of our relationships.
We would expect to be able to put secured debt on in an efficient way, but it would be more expensive than the expiring debt. The market's moving all over the place. I'm not, you know, I don't have a, you know, a view today on what the all-in rate would be other than it would be, you know, it spreads, you know, higher than maturing. We would be able to compensate for that, you know, from lower LTVs.
All right. Thank you.
Our next question comes from the line of Floris van Dijkum with Compass Point. Please proceed with your questions.
Hey, good morning. Just a follow-up question. I think, Leslie, you mentioned something about BT, I'm somewhat encouraged by BT was 85% of 19 levels. I think you said, April, it's actually even higher. Will BT get to or can it get to 100% of 19 levels this year in your view? What does it take? Obviously, we've got some economic uncertainty still weighing over us, et cetera. Maybe you can give a little comment, and how does that view your perspective on the company and on the market as well?
Look, I would generally say that, you know, BT is grinding forward. We don't necessarily see it getting back to 2019 levels by the end of this year. We do think it's a possibility that's a 2024 story. Obviously we all know the million-dollar question is, does BT get back to 100% or not? What I would say is that we have confidence that the puts and takes between all the segments, and given the elevated rate growth that we're seeing across the portfolio, across the segments, is gonna allow us to achieve, you know, our 2019, you know, revenues, you know, across the portfolio.
What I would say to you is that, you know, we all as an industry are evolving to be able to capture the new breakdown of segmentation, and we think that our portfolio is built for that. When you think about our urban-centric portfolio, our urban lifestyle assets, which are sitting, you know, in the heart of seven day a week demand, the nature and types of assets that we have, whether the mix between BT and leisure, you know, evolves, we can capture that. I think that we're net-net positive on how BT is evolving, but as the new normal continues to shake out, our portfolio is uniquely positioned to be able to capture the evolving mix, is what I would say.
Yeah. Just to bolt on to that, kind of with respect to our guidance relative to first quarter as well as fourth quarter. Our RevPAR was, you know, improved relative to 1,900 basis points, fourth quarter to first quarter. Our guidance implies at midpoint, we're at 99% of 2019 levels of RevPAR. Another, you know, 400 basis points of recovery quarter-over-quarter. I think that is as much a, an indication of how we believe that the recovery is gonna continue to unfold. Because of our urban-centric portfolio, and BT being a driver of that in this moment in time, you know, we think that is overall giving us the confidence to give the guidance that we gave.
Thanks. That's it for me.
Our next question comes from the line of Gregory Miller with Truist. Please proceed with your question.
Thanks. Good morning, all. I'd like to also, talk about, ask for a question about business transient. Could you provide an update on negotiated corporate ADR trends, now that we are past the winter months? Where is negotiated, ADR today compared to the mid-single-digit growth, that had been previously articulated? Thanks.
Good morning, Greg. It's Tom. Yeah, we're actually pleased with how it shook out. When we went into the negotiation process, which starts in the August-September timeframe, it was pretty lengthy going into fourth quarter as well as first quarter, we had a pretty significant ask on the table, knowing that we had, you know, a walkaway price at the same time. Where we ended up, you know, globally, was somewhere between 5% on the minimum and high single digits on the top end. You know, there's obviously accounts that, you know, when you think about volume, to Leslie's point about the grind forward, we're seeing significant volume year-over-year, which was an easy comp if you think about 2022 Q1 versus 2023.
More importantly, we're seeing movement from what Sean was just talking about, from Q4 to Q1, where our mix is increasing. The type of accounts that are increasing are the large corporations. As you all know, SMBs have been, you know, kind of holding up, if you will. Now we're starting to see growth from, you know, the tech companies, even though they went through a correction in regards to the hiring process. We're actually seeing volume start to, you know, gain traction, you know, from aerospace and automotive, consulting, where we see Deloitte, Accenture, and PwC and Ernst & Young coming back and staying at our hotels.
A leading indicator of that is when you look at source of business, you know, which was in the low, you know, high single digits percentage-wise, now is at double digits, right? You're looking at the demand is coming through the Amex travels and the organizations that typically book those type of BT events. We're encouraged how it ended up, and we're seeing the growth in rate, and then the volume is starting to also, you know, track back to 19, but certainly over 2022.
Great. Thanks so much for that. The other question that I had for you, I believe that there is an AHLA out in progress on the front desk, and I found that interesting. Not to front run-
Greg, you're breaking up. You're breaking up, so we didn't hear part of your question. I'm sorry.
Is it better?
Try again, Greg.
Try again. Try again.
Okay. Sorry about that.
We can hear you now.
I believe that there is an AHLA survey in progress on the front desk, and I found that pretty interesting. Not to front run the survey, but I'm curious how front desk staffing and labor costs are trending for the portfolio today. Is the position harder to fill for hourly roles?
Yeah. I would say, when we think about our desk and what's happening there versus housekeeping and food and beverage, we've been able to maintain levels because you have to obviously have a certain amount of folks on the shifts as occupancy starts to increase. It typically has not been the hardest area to find, jobs compared to, let's say, housekeeping and food and beverage because of what happened, you know, when you think about the restaurant industry and the move where group took a little while to come back. The desk has always been something that we've been maintaining. To Leslie's earlier point, we always can cover shifts if we need to, you know, when it comes down to having managers do that as well, even if we had a little bit of, you know, slow track back.
We typically haven't seen that be the topic where we've been able to have retention. In fact, what we've done, which I think is interesting, Greg, we have an upselling program. With that, you know, the whole goal is to try to drive average rate and put people in views, configurations. It's actually been attractive for the desk folks to be able to be hired and have that opportunity to have a little incentive in place, which they get a piece of the pie if they were able to upsell. We found that program to be highly attractive to be able to get more people on the desk to be able to work at our assets.
Okay. Terrific. Thanks so much for all the information.
We have reached the end of the question and answer session, I'll now turn the call back over to Leslie Hale for closing remarks.
Thank you all for joining us today. I would just like to reiterate that the positive momentum that we've seen in our portfolio, our urban concentration position us for continued growth, and that we talked about a number of catalysts that are unique to RLJ, and that provides us confidence that we can continue to outperform. Look, I look forward to seeing many of you at NAREIT. I hope all of you have great summer plans, and I wish you all well for the summer. Thank you, everybody.
This concludes today's conference, and you may disconnect your line at this time. Thank you for your participation.