Chatham Lodging Trust (CLDT) Q2 2024 earnings summary

Executive summary

• Successfully refinanced $280 million of maturing debt, leaving only $30 million due in the next year and no liquidity issues.

• Acquired a new 148-room Home2 Suites by Hilton in downtown Phoenix for $43.3 million, marking the first acquisition since 2022.

• Revenue for Q2 2024 increased 2.4% year-over-year to $86.5 million, driven by a 3.6% rise in same property RevPAR and the new hotel acquisition.

• Net income for Q2 2024 was $7.0 million, down from $9.4 million in Q2 2023, primarily due to higher operating and interest expenses.

• Opportunistically marketing several hotels for sale, expecting $40–$80 million in proceeds.

Financial highlights

• Q2 2024 hotel EBITDA was $33.7 million, adjusted EBITDA $31.4 million, and adjusted FFO $0.39 per share.

• Same property RevPAR for Q2 2024 increased 3.6% year-over-year to $150.69, with occupancy at 82.3% and ADR at $183.16.

• Hotel EBITDA margin was 39%, down from 41.3% in Q2 2023, and GOP margin reached 46%.

• Interest expense increased 19.9% to $7.7 million in Q2 2024, reflecting higher debt balances and rates.

• Cash, cash equivalents, and restricted cash totaled $25.7 million as of June 30, 2024.

Outlook and guidance

• Q3 2024 guidance: RevPAR growth of 0%–2.5%, adjusted EBITDA of $28–$31 million, adjusted FFO per share of $0.31–$0.36.

• Net income guidance for Q3: $3–$5 million ($0.01–$0.06 per diluted share).

• The company plans to invest approximately $18.1 million in renovations and improvements for the rest of 2024.

• Short-term liquidity needs are expected to be met through cash balances and credit facility availability.

• Fourth quarter RevPAR expected to be similar to third quarter.