Chatham Lodging Trust (CLDT) Q3 2024 Earnings Call Highlights: Strong RevPAR Growth and ...

In This Article:

  • Proceeds from Hotel Sales: Expected to generate approximately $80 million from selling five hotels.

  • RevPAR Growth: 2.1% growth excluding renovations, compared to industry growth of 0.9%.

  • Same-Store GOP Margin Decline: Limited to 40 basis points.

  • Absolute GOP Margins: 45% for the quarter.

  • Third Quarter RevPAR: $150, exceeding 2019 levels.

  • Silicon Valley and Bellevue Hotels RevPAR Growth: 8% in the quarter, 14% in October.

  • Occupancy Rates: 79% on Monday, 84% on Tuesday and Wednesday, 79% on Thursday.

  • Weekday ADR: Up 2% to $186.

  • Hotel EBITDA: $32.2 million for Q3 2024.

  • Adjusted EBITDA: $29.6 million for Q3 2024.

  • Adjusted FFO: $0.35 per share for Q3 2024.

  • Hotel EBITDA Margin: 37.1% for Q3 2024.

  • Net Debt to LTM EBITDA: 4.2 times as of September 30th.

  • Q4 Guidance RevPAR Growth: Expected 1% to 3%.

  • Q4 Guidance Adjusted EBITDA: $19 million to $21 million.

  • Q4 Guidance Adjusted FFO per Share: $0.15 to $0.18.

Release Date: November 07, 2024

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

Positive Points

  • Chatham Lodging Trust (NYSE:CLDT) has entered into contracts to sell five hotels, expected to generate approximately $80 million in proceeds, which will be used to pay down debt and make additional investments.

  • The company reported strong liquidity with the lowest leverage levels in over a decade and only $30 million of debt maturing over the next year.

  • RevPAR growth continues to exceed industry and peer performance, with a 2.1% increase excluding renovation impacts, compared to the industry's 0.9% growth.

  • Chatham Lodging Trust (NYSE:CLDT) achieved strong GOP margins of 45% and hotel EBITDA margins of 37.1% in Q3 2024.

  • The company is well-positioned to benefit from declining interest rates, with significant exposure to floating rate debt, potentially increasing FFO by $2.6 million for every 100 basis points decline in rates.

Negative Points

  • Five hotels being sold are among the lowest RevPAR performers in the portfolio, indicating potential challenges in maintaining overall portfolio performance.

  • Despite improvements, the recovery of the five tech-driven hotels in Silicon Valley and Bellevue has been sluggish, impacting overall performance.

  • Benefit costs increased by 18% in the quarter, adversely impacting margins by approximately 60 basis points.

  • Insurance costs have risen by 20% year-over-year, impacting margins by another 20 basis points.

  • Utility costs have increased, adversely impacting margins by 20 basis points, indicating ongoing operational cost pressures.

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