RLJ Lodging Trust (RLJ) Q3 2024 Earnings Call Highlights: Strong RevPAR Growth and Strategic ...

In This Article:

  • RevPAR Growth: 2% growth, driven by a 1.4% increase in occupancy and a 0.6% increase in ADR.

  • Occupancy: 75.1% for the third quarter.

  • Average Daily Rate (ADR): $193.39.

  • RevPAR: $145.23.

  • Business Transient RevPAR Growth: 8.7% above 2023, with ADR growth of 5% and occupancy growth of 3%.

  • Group Revenue Growth: 3.4%, with a 1.4% increase in demand and a 1.9% increase in ADR.

  • Leisure Revenue Growth: 2%, driven by a 4% increase in demand and a 2% decline in ADR.

  • Non-Room Revenue Growth: 7.3%, contributing to total revenue growth of 3%.

  • Hotel EBITDA: $100.7 million, representing 2.6% growth above 2023.

  • Hotel EBITDA Margins: 29.2%.

  • Adjusted EBITDA: $91.9 million for the third quarter.

  • Adjusted FFO per Diluted Share: $0.40.

  • Weighted Average Interest Rate: 4.56%.

  • Liquidity: Approximately $885 million at the end of the third quarter.

  • Debt: $2.2 billion, with 74% either fixed or hedged.

  • Share Repurchases: 2.2 million shares repurchased for $20.7 million year-to-date.

  • Quarterly Dividend Increase: 50%, with a new dividend of $0.15 per share.

  • 2024 RevPAR Growth Guidance: Expected to range between 1% and 2.5%.

  • 2024 Hotel EBITDA Guidance: Between $382.5 million and $402.5 million.

  • 2024 Corporate Adjusted EBITDA Guidance: Between $346.5 million and $366.5 million.

  • 2024 Adjusted FFO per Diluted Share Guidance: Between $1.45 and $1.58.

  • 2024 Capital Expenditures: Estimated between $100 million and $120 million.

  • Net Interest Expense Guidance: Expected to be between $92 million and $94 million.

Release Date: November 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • RLJ Lodging Trust (NYSE:RLJ) achieved a 2% RevPAR growth rate, which was double the industry average, demonstrating the strength of its urban-centric portfolio.

  • The company successfully refinanced all near-term debt maturities and executed attractive interest rate hedges, enhancing financial stability.

  • RLJ Lodging Trust (NYSE:RLJ) increased its quarterly dividend by 50%, reflecting strong financial performance and commitment to shareholder returns.

  • The company completed two hotel conversions, resulting in a strong RevPAR growth of 17% year-over-year for these properties.

  • Business transient demand showed significant improvement, with nearly 9% revenue growth driven by both ADR and occupancy gains.

Negative Points

  • The impact of storms and the election is expected to constrain fourth-quarter RevPAR by approximately 100 basis points.

  • Leisure revenues grew by only 2% during the third quarter, with a 2% decline in ADR, indicating consumer pricing sensitivity.

  • The transaction market remains constrained and choppy, with a wide bid-ask spread, limiting opportunities for asset sales or acquisitions.

  • Operating cost growth, although moderated, remains a concern with wages and benefits increasing by 4% to 5% year-over-year.

  • The company anticipates a softer fourth quarter relative to prior expectations, partly due to the impact of Hurricane Milton and election-related disruptions.

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