Room to raise the ceiling: management says its own prices, rates, or terms sit below what the market would currently bea
The model's full reasoning — Q2 2021 call → NOWe need to determine if management conveys that the company is currently charging less than the market would bear, and that it is actively closing that gap. The transcript discusses Observatory pricing, per caps, and mix. Tony Malkin mentions that they have higher per caps, direct sales, and that they are maintaining higher customer satisfaction. He says: "We believe that we can maintain our current Observatory operating cost structure up to approximately 60% of our 2019 attendance. With more international inbound tourists, we believe we will see growth from lower-margin passes and online travel agent tourists, which will lower our per caps." This suggests that currently they have higher per caps due to direct sales, but they expect that as international tourists return, per caps will lower. That is not about raising prices to close a gap; it's about mix shift. They also mention that they have not changed hypothetical admissions forecast. There is no explicit statement that they are undercharging relative to value and are now raising prices. They talk about maintaining high per caps, but not about a gap. They also mention that they have increased hours and reopened exhibits, but no pricing action. The only pricing-related comment is about per caps being higher due to direct sales, but that is not a claim of undercharging. They also mention that they are not sure how revenue per cap will hold up as international travelers return, implying they might lower. So no. Thus answer NO.
| Ticker | Company | Call | Date | Call grade |
|---|---|---|---|---|
| MEC | Mayville Engineering Company, Inc. | Q3 2022 | 2022-11-05 | B+ |
| CAG | Conagra Brands, Inc. | Q2 2017 | 2016-12-22 | C+ |
| SOHO | Sotherly Hotels Inc. | Q3 2016 | 2016-11-08 | D |
| RCL | Royal Caribbean Cruises Ltd. | Q1 2016 | 2016-04-29 | C+ |
| HPP | Hudson Pacific Properties, Inc. | Q4 2015 | 2016-02-25 | C |
HPP · Q4 2015 → YESThe question is: Does management convey that the company is currently charging LESS for what it sells than the market would presently bear — that its own prices, rates, fees, or terms sit meaningfully...YES The transcript shows management explicitly describing a gap between its current charges and what the market now supports, then confirming that the company is already closing it through mark-to-market resets and higher new/renewal rents. Victor Coleman states that the company has “rolled out 80% plus mark to market” on recent leases 2.5 years old, and that cash rent spreads on 1.6 million square feet executed since the acquisition were “north of 30%” with “20%, 25% mark-to-market for 2016 and 2017.
MEC · Q3 2022 → YESThe question is: Does management convey that the company is currently charging LESS for what it sells than the market would presently bear — that its own prices sit meaningfully below the value custom...YES Management explicitly states that they have taken pricing actions in 2022 and have "more room for margin expansion through continued value pricing even beyond the pricing actions taken during 2022." This conveys that their current prices sit below what the market would support, and they are actively beginning to close that gap with further value pricing.
SOHO · Q3 2016 → YESThe question is: Does management convey that the company is currently charging LESS for what it sells than the market would presently bear — that its own prices, rates, fees, or terms sit meaningfully...YES The transcript shows management explicitly identifying a rate gap at the Laurel hotel (and similar situations at other properties) where current charges sit below the competitive set/market, while describing active steps already underway to close that gap through continued ramp-up and occupancy/rate improvements.