Chatham Lodging Trust (CLDT) Q3 2024 earnings summary

Executive summary

• Entered contracts to sell five older, low-RevPAR hotels for $80 million, with proceeds to pay down debt and reinvest in higher-growth assets.

• Q3 2024 revenue was $87.2 million, up 0.5% year-over-year, driven by a 1.3% increase in same property RevPAR and the acquisition of a Phoenix hotel, offset by the sale of a Denver property.

• Net income for Q3 2024 was $4.3 million, down from $7.5 million in Q3 2023, primarily due to higher interest expense and operating costs.

• EBITDA and FFO near the top of guidance, driven by RevPAR growth and controlled expenses.

• Strong liquidity and lowest leverage in over a decade, with only $30 million of debt maturing in the next year.

Financial highlights

• Q3 2024 hotel EBITDA was $32.2 million; adjusted EBITDA $29.6 million; adjusted FFO $0.35 per share.

• Q3 2024 revenue was $87.2 million, with same property RevPAR up 1.3% to $150; ADR rose 1.3% to $188; occupancy flat at 80%.

• Net income to common shareholders was $2.3 million for Q3 2024, down from $5.3 million in Q3 2023.

• GOP margin at 44.5% and hotel EBITDA margin at 37.1% in Q3.

• Cash, cash equivalents, and restricted cash totaled $28.8 million at September 30, 2024, down $56.9 million from year-end 2023.

Outlook and guidance

• Q4 2024 guidance: RevPAR growth of 1%-3%, adjusted EBITDA of $19-$21 million, adjusted FFO per share of $0.15-$0.18.

• Full-year 2024 RevPAR expected to exceed 2019 levels for the first time since the pandemic.

• Management expects modest RevPAR growth for the remainder of 2024, with continued recovery in business travel and inflationary pressures on costs.

• Benefit costs expected to be flat year-over-year in 2025.

• Guidance assumes three hotel renovations, $14 million mortgage repayment, and no additional acquisitions or equity/debt issuance.