In This Article:
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RevPAR Growth: 4% in Q2 2024, with RevPAR of $151 exceeding 2019 levels.
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Occupancy Rates: Weekday occupancy at 85% on Monday, 88% on Tuesday, 84% on Wednesday, and 83% on Thursday.
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GOP Margin: 46% in Q2 2024, at the top of guidance range.
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Hotel EBITDA: $33.7 million in Q2 2024.
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Adjusted EBITDA: $31.4 million in Q2 2024.
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Adjusted FFO: $0.39 per share in Q2 2024.
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Debt Repayment: $280 million of maturing debt repaid in the past three months.
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New Acquisition: Acquired Home2 Suites by Hilton Phoenix Downtown for $43.3 million.
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Net Debt to LTM EBITDA: 4.3 times as of June 30, 2024.
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Q3 2024 Guidance: RevPAR growth of 0% to 2.5%, adjusted EBITDA of $28.1 million to $30.6 million, adjusted FFO per share of $0.31 to $0.36.
Release Date: August 02, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Chatham Lodging Trust (NYSE:CLDT) successfully repaid approximately $280 million of maturing debt, leaving only $30 million due over the next year, indicating strong financial management.
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The company acquired a new hotel, the Home2 Suites by Hilton Phoenix Downtown, strategically located in a vibrant area, which is expected to drive diverse demand.
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RevPAR growth was strong at 4% for the quarter, with occupancy levels up every day compared to last year, indicating a recovery in business travel.
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Chatham Lodging Trust (NYSE:CLDT) reported a GOP margin of 46%, finishing at the top of their guidance range, showcasing effective cost management.
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The company is positioned to benefit from declining interest rates due to their exposure to floating rate debt, potentially increasing FFO by $2.6 million for every 100 basis points decline in SOFR.
Negative Points
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RevPAR growth was impacted by the timing of the Juneteenth holiday and the July 4th holiday, leading to a decline in performance during those periods.
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Hotel EBITDA margins were down 230 basis points compared to the previous year, partly due to non-recurring expenses and increased costs in areas like payroll and insurance.
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The leisure segment of their portfolio saw a RevPAR decline of 2%, indicating potential challenges in this market segment.
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The company faces challenges in achieving ADR increases, particularly in the leisure segment, which could impact overall revenue growth.
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Chatham Lodging Trust (NYSE:CLDT) has some hotels facing upcoming renovations, which could require significant capital expenditure without a clear return on investment.
Q & A Highlights
Q: Can you elaborate on the trends you've been seeing in recent weeks, particularly in tech markets, and how leisure demand is affecting the third quarter outlook? A: Dennis Craven, Chief Operating Officer, noted that leisure hotel performance was down 2% in the second quarter and doesn't expect significant changes. The July 4th holiday impacted RevPAR, but overall, they anticipate steady performance with potential improvement as business travel picks up post-summer.