CLDT - Earnings call transcript Q1 2019

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings, and welcome to Chatham Lodging Trust’s First Quarter 2019 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to Chris Daly, President of Daly Gray. Thank you. Please go ahead.

Chris Daly

Brenda. you, Thank and quarter everyone the Lodging Chatham Good results welcome conference first XXXX call. Trust morning to Please note that forward-looking many of our comments defined federal statements today by securities laws. as are considered both subject risks in are most XX-K filings. Form other recent unknown, statements These our and uncertainties, as known to described SEC and and is All call May XXXX, as information in unless X, of this otherwise noted. to the no forward-looking statement the statement And company’s any to in changes update the actual obligation company or to undertakes expectations. results conform

of copies which non-GAAP measures on find You filings release, referenced SEC call can our earnings chathamlodgingtrust.com. our contain and this at reconciliations financial our to website on

Dennis to provide and Chief Executive Officer; first introduce XXXX me Officer. Vice and Now Chatham’s Operating to Vice Senior Jeremy Financial with Officer; you Jeff Chief Fisher, of and President Craven, the results, President and allow insights President quarter Chairman, Wegner, some Executive Chief

Let Jeff Fisher. me Jeff? session to turn over the

Jeff Fisher

today that chance quarter everybody. first we morning our Good those. review to has Chris. everyone Earlier Thanks, reported hope had and results a

line together by and sources growth report with FFO maximizing and any We’re happy adding room expectations. side remain with intensely focused margin on EBITDA higher and or of enhancing Hospitality, loss. minimizing goal becoming Island management basically driven mitigating but revenue, guidance, with exceeding asset on as efforts, sluggish, as RevPAR operating industry possible our remains Overall our RevPAR the other of revenue with the margins creep expense efficient to as in

the actual initiatives, a up revenue are comparable despite heard actually $XXX,XXX last made with initiatives progress year, revenue. There since talk year-over-year, decline and XX of and pleased many these the was our in these through You’ve I’m room we’ve hotels, total us about results.

$XXX,XXX $XXX,XXX $XXX,XXX X%, package without I that’s to lot approximately lastly, quarter. compared We’ve with tools pretty existing up opening with that is policy the revenue, by operating last invested and revenue benefiting $XXX,XXX incremental up management parking first the approximately a well affiliation in new revenue or our A time execute revenue services. has and very enhancing and think. honestly think to year. working bar or up revenue other few And be enhanced enhancing Amenity about the on capabilities, our miscellaneous designed a XX-hour maximizing this as was XX%, impressive and front, of F&B over revenue prior personnel to was and examples, Island. great Island I we’ve results, difficult was year, will internal our quite and from cancellation seen bar all

Index grew RevPAR XXX we’re we get that. operate into X% a this of on in, X% costs proud months Our than so down basis in, competitive and more Dennis six last better X%, sets little past the by markets points over Benefits pretty are quarter, that. the almost detail actually that that and or the will

than of Bourbon quarter, of we bar pretty little hotel. $XX,XXX, by In and that quite first meeting of the this generate our full The that at about bar Suites the converted I example liquor new the a small and revenue we called the seldom on a very way, build and good XX% other about slow of almost we seasonally our wanted profit XXXX, would the barrel. on during should again pretty is and corner and the just did Day we $X.X margin concept pace revenue Savannah increase $XXX,XXX is that time our out bar initiated and of to specialized Downtown increasing that Savannah ROI And used at that year, is And in million. a rate this food into has some a percentage. for for F&B some profit have year. other from downtown establishment. small first service cap a out frontage space Patrick’s cool street I value on point it return by Another the ancillary least on any the toasted brand hotel at service of with bar a space St. bar hotel attractive generated a XXX,XXX highlight outlet reasonable for investment that SpringHill of Continuing a which to other quarter

of invest I going potential continue to number $XXX,XXX is think, our or Strategically, with developments. conservative. to the to using intention pretty So why, in we’re proceeds acquisitions that’s those sales the explore asset

at than as looking or based trying I more the I to But stabilized unreasonable at least are on certainly expectations pay. us a yield. owners will what think more have a think, deals see their hotels because, We’re last for to market and just we think in rate are we year going ought what market cap

any acquisitions. announced not have we why that’s So

try at in And we’ll source more success Innkeepers. with we of to through life could value, our We had really brand through prior we’ve doing and where out to few conversion opportunities are course there. a continue or really, whether looking bring value-add management that

low that open those about risk adjusted think rate perhaps two will watching we than provide that has the the hotels to return also deals. something in we’re one a right at kinds and shrink. So talked cap of returns, more stabilized developing We’ve or buying markets attractive

markets, to supply trend of which So To direct past raised is opportunities million a we’ve we’re markets, it in continues our build market the peaked good XXXX, ADR $XXX as touch supply growth. The like to a we that position of I’d excuse over on XXXX in year tracks managed over each we that, in new to XXXX, is Dennis. news our turn in upscale put same supply want X% just We’ve down that us a same years, little in over X%, X% encouraged at far it bit by for of as XXXX. almost measured and a in good is news in timeframe, to. With to and our occupancy X% growth couple that XXXX has by the good Travel well. if those to result, that couple suffered briefly to maintain Smith and me, all as declined in know so but has

Dennis Craven

A of morning combined to ADR Good XX X.X% of our and X% XX% comparable in everyone. a occupancy Jeff. RevPAR XX points loss at driven decline to Thanks, of was hotels $XXX. gain by with a basis

January, we Within X.X%. comps slight which points bit little saw trend, industry the tough was quarter, our in in of facing of in down and March growth the February RevPAR think March, We I a were to basis compared up our down peers bucking the in of some contributed quarter X% XX RevPAR X% did. X% weaker decline than which to

all, so lost in have are do a XX loss Atlanta we First to basis Bowl FEMA year, any outside at XX completed Dedham, large we our basis which impacted year-over-year points due last tuff points non-recurring this an Super Massachusetts. not another to comparison in us. of points Inn hotels Boston of inns, XX it to our was Sunnyvale renovation one approximately in and we some in related related year of basis at residence the Residence Minneapolis was And lost We of for approximately February. event

talk markets about Valley on our of bit for contributes month those. contribute residence of six the thirds RevPAR a And was was up of renovation EBITDA Silicon about in under strong represents all last Sunnyvale little RevPAR Mission of our XX% our basically up that’s at X% quarter. largest are inn the a hotels, despite out in of hotel an newly hotels, Valley. are been X% X%. very Silicon growth with under RevPAR valued EBITDA. other location one growth a going three renovation and being innovation XX EBITDA. the by Diego, $XXX. RevPAR had our of encouraged quality Inn and up three We in our that happy X.X% benefiting San was most second our Our the to our largest was posting valley as for Customer when of comp least under clients XX% excluding to assets approximately each I’m basis. remain And take hotel the at that in two well Valley you market, market. the was economic received trailing residence four And our our easy of year. generates depth ValleyResidence Silicon inns from room designed the at by residence with XX% the fantastic, inns reviews

X.X%, government about undergoing X%; be Tysons due the and our third Washington was RevPAR the Inn this in the major this at year. from Washington Residence was X% hotels D.C. D.C. in earlier that in Virginia in was Our the renovation downtown two to a the market other down quarter. and impact RevPAR down RevPAR market, would Springfield, declined shutdown largest primarily

significantly Inn experience Residence happen we complete, and as Tysons is Our outdoor that so on look working enhanced lobby renovation the property. blew the in things guest there for and to pretty we experience enhanced a well, we’re good up

our central business for hotels down was which Hampshire demand market University West RevPAR Harvey they made flat driven the increase and leisure Leisure was great largest they hotels hotels two down a out New – X%. Maine. in two remains almost and RevPAR first the hotels comp. coastal represents hotels Northeastern by RevPAR and X%. our in which three XXXX basically a approximately course, had quarter. our market, Those occupants while Portland, Portsmouth, an tough first had Hurricane RevPAR had are still with fifth two Our stand hotels a with X%, quarter these hotel Houston, in at quarter, medical strong was advancing at XX% two of RevPAR the

both supply and Looking hotels challenge market need still to some that that face forward, due and for well to new a residence supply, a certainly difficult some doesn’t want got Medical it the Intercontinental, in XXX-room are Houston, do Center, market we’ve large our reason brand Center people in a hotels at Medical that as inn but now in open. that as build new

comparable up. talking Angeles, that. and And XX% move think Payroll approximately Island-managed good of Pretty quarter. in quarter. comparable of about first RevPAR And and excludes of down of certainly little was a and us Jeff Los the our expenses our still total spent over for when the LA XXXX, X% basis at I both benefits XX% XX a hotels, about at actually operating hotels quarter. good revenue one expected. consider Total represent quarter of RevPAR hotels in XX X%. to RevPAR the with Within growth market, our the first Marina up our Rey X% del looks year was be for growth At approximately Anaheim higher JVs to with continues revenue. XXXX showed you in declined operating time advancing largest XX which margins sixth plenty our Our was Both points. our darn acquired X% RevPAR hotels

were For a room the per on quarter and occupied up payroll benefits X.X%. basis

but premium bottom management some to implemented in years In a at look claims line occupied adjustments we’re with initiatives. our down again good a quarter as the we cost X%. XXXX, Working first been year-over-year, X.X% asset once quarter our less than pop benefits to lower result. when room portion basis. wages the and due some X.X% renewal as increase has for is Again, during with is The some and were in to you numerous a XXXX per our plan due well as own getting benefit declining, up on the hospitality,

over of the respect their into the lot programs. and a drive year reward efforts to by the implement to in the their attention to been an membership renegotiate C-corps guest industry costs to consumers the OTA there’s past agreements changes acquisition to Lastly, with programs,

acquisition quarter, our it and were guess, turn over first Jeremy. basis go aided points. about and costs by down our margins During I’ll I this ahead to XX X%

Jeremy Wegner

Dennis. morning everyone. Thanks Good

the to of compared FFO income Adjusted income as quarter. and per compared per similar to quarter share primary the which million, FFO $XX.X charges Adjusted EBITDA of compared For In items in Adjusted for $XX XXXX. to to two in $X.X million million $X.XX the QX for $X.X $X.XX our in was million approximately quarter, which and income of to of the differences net ventures other and quarter adjusted $XX.X million XXXX, depreciation, XXXX. million, $X.X X.X% net reported EBITDA QX joint between non-cash share net relates QX million to the we increased The $X.X such was our joint the ventures approximately adjusted QX FFO million, million within XXXX. decrease quarter compared the $XX.X contributed in were costs the a million in $XX.X generated of was in share company $X.X FFO. of X.X%.

Inland Innkeepers in First up and the X.X% up the quarter was portfolio. RevPAR in portfolio X.X%

balance like net condition. XXXX, our Houston debt Lauderdale debt the cost-of-debt to our Inn quarter, weighted QX Inn end was I’d account and Transitioning of million, was the At and the into our Inn San sheet average remains weighted Fort XX.X%, $XXX average ratio in excellent X.X in year Mateo, in QX X.X% to note Our and Residence years. our it in Residence for our Inn full was Residence renovations maturity that Inn leverage Hampton our Houston guidance and QX. QX, Residence Sunnyvale X of was takes

We X.X%, full be RevPar be year unchanged XXXX and expect X.X% for year. our plus guidance to X.X% QX plus from initial growth RevPar to plus to X.X% to minus the

to surge will Boston difficult QX XXXX. onetime face area in QX in due the business related comparisons our reminder, As a very leak gas properties

comparisons our points. overall will RevPAR by Boston that basis expect the We growth impact challenging XX properties for XXXX approximately our

full On million million basis, of two corporate $X.X full Our EBITDA JVs to and to year the million of cash million G&A $X.X FFO. for contribute a is $XX.X $XX.X forecast expected million. $X.X to year are

$X.XX are to which million, FFO or adjusted $XX.X increasing $XX.X to per We is of $X an midpoint. million full the year increase share guidance at our million

for concludes it this at remarks we’ll up think operator, questions. our open I that point, and

Operator

[Operator line Riley. the Instructions] questions Bryan Our are first Maher of B. with from

Bryan Maher

Good Yes. morning guys.

Jeff Fisher

Bryan. morning, Good

Bryan Maher

it of Do or continues moderates payroll benefits back rate and think has of The decelerate. here? the think continued XXXX that in that to you half you through increase

Jeremy Wegner

about But, as X% X.X%, don’t moderates, I’m around decelerates it was it kind benefits not was I up total X% think and total it decelerates that more benefits wages wages of X.X% think – of range, down than soon. piece of much X.X%, is sure right. for and portion a wages I anytime but probably so we’re that in the

Jeff Fisher

months And that is made last of this the adjustment six benefits, year. Jeff, was for we the last

numbers, your be down as all through at much lap So pretty because were halfway those you levels the benefits year. won’t adjusted the

Bryan Maher

at do comps? weakness, an tough And was that And of ballpark. and the then attribute activity looking how to how that was you And the expect of I number, kind exact do suspect a ongoing? Okay. RevPar supply you much but renovation kind much don’t

Jeremy Wegner

the a did points only other listen, little for I Virginia Sunnyvale just our an hotel RevPar mean quarter impact. hotel Yes, Dedham about under as basis our to property under Boston adverse was our alone The of a for renovation we furlough. it have XX Tysons – period and our

full point So it’s a probably in total. about

Bryan Maher

at, on think Okay. And has market then years, up we several to trend we the in supply do look and improving. ran you when your XXXX What out your how markets, you XXXX, shaping last we been as are new look think supply? the about through

Jeff Fisher

Jeff. is This

the amount As number and a that you year, to it look from next at pretty good time for Travel there’s X% the fair looks overall. books like Smith is numbers the reports, probably

least level. additions So you’d seeing year, that be supply I at another would for for imagine us at

Bryan Maher

year? is in then this and some dispositions, potential cap spread? it how you touched is done I are get and bid and out lastly, just What you rates? seeing ask the wide And are Jeffrey. stuff for for that Alright, XXXX. you relates actually How as this you some there Acquisitions the upon think, comfortable to dispositions maybe

Jeff Fisher

the spread think I Well, is wide.

is basis, or us the is accretive on opportunistic and Western or to EBITDA rate of up whatever we’ll But an going we’ll somebody and are look of in I will But for sort declining up we’re an So problems get to in get of not few were that expectations to recycle somebody I’m right of a to those our allow way. and that else But capital high not year there I the chest so a cap selling or a deals done on say RevPar a in thinks think think had And PA stand kind gap rid go hotels. because speak. my soapbox next beat out and continue bunch wide latch because so. now. to

Bryan Maher

from all That’s me. Thanks.

Jeff Fisher

Good.

Operator

next with [Operator you. Thank line Tyler the from Our Instructions] Batory Capital. Janney are of questions

Tyler Batory

everyone. morning good Hey,

Jeff Fisher

Tyler. Hey,

Tyler Batory

a There are March? as questions what boxed the on to you’re circle more me. bit Can the comment you And trends. helpful in you’re in end well. Obviously you you any little for able quarter? of April, in would guys provide couple back then saw be and industry color what on if seeing That second

Jeremy Wegner

us, and we have Diego good helped that the and specifically Silicon I main a in helped pretty Yes, for thing piece think San March. Valley corporate our I of in did business quarter mean,

also leisure that I in had our you kind stronger primarily those of as March. the little about are think outperform Northeastern a I of us helped talked hotels. in bit But demand markets

Tyler Batory

wanted it. Okay, I And about ask Silicon to Valley. got also then

we I that be full from down slightly to do for think outlook year perspective? very Silicon for were to Any your your could the last expectations going spoke, in year slightly, change first time obviously, RevPar the full quarter. what performance strong up market a Valley was

Jeremy Wegner

mean, the I for adjusted especially up corporate a Passover and our accounts certainly little squirrelly some expectations we higher, bit way Easter is excluding it’d of a our bit. we’ve we’ve moved little April Silicon to be with But the expectations little with have. listen, Valley, that Yes, larger think just where holidays, the I a by up renovation bit

we’re the at quarter our our renovation our Inn, and quarter starting quarter our in starting fourth you our Sunnyvale in renovation started second Residence Mateo remind we the in to Just – fourth second location. San be we’ll

So certainly year. a we market that’s healthy renovations, of listen, still believe the this outside for

Tyler Batory

recent purchased When a December. in me. had you Charleston look Dallas, you that and for then you in Okay, just of more at the bought and property great. you And acquisitions couple some

on what’s a two performing assets, those bit little going in versus more, you discuss your underwriting? how they’re As

Jeff Fisher

mid-to-even our been can’t supply, was been Yes, But case short model here sort budget, although model. in has and in because home, definite AVR we’re lately. having say the that goodness and down, not up we Thank there opened up our been I’d I’d whereas index on the – been our Residence has Charleston particularly, market that RevPar down opened single-digit and disappointment the index has to one itself of than suites a down, the our it Inn put better the we really our there, our has as it’s falls there. around quadrant upper in finger two

we that’s obviously the area the market, to addition So the and I Volvo et think of the other and haul especially the be in a cetera occurring disappointment, but second occurring. all and is believe, firmly that all still had the in underwritten for we construction longer developments plant,

So it think now. not feel good surprise. been I has a pleasant Dallas overall,

Dallas expectations for especially. good. And been has underperforming AVR think in the But like brand our this occupancy at hotel case, I new pretty markets most exceeding again. on level a

feels good I unlike one able numbers. Charleston, make our to for that real So think year, we be ought and to the

Tyler Batory

And timeline, Okay. last just markets developments. for et costs, Can where Thank me. you. that me sense, you all could us make Great. then remind for question cetera? That’s

Jeremy Wegner

get where of what’s be to down, certainly to think to that, like think Yes, to We progress Silicon well going we’ll Cal, down soon markets let as of obviously. as we’re Tyler, we I on certainly we cost still don’t an kind in options or in have we’re a West able potential a big markets, of know we’re for good as Coast continue going but listen, road, the developments. really believers anybody we yet Valley anything the Southern estimate mean, couple as I position, as for – as

Jeff Fisher

costs not we specific doing We’ve that it. otherwise a and basis we be we’re we’re estimates the stabilized than if greater road. that even not got disclose could And great, not But getting around then XXX be going XX% to some construction or but that even then yield, annum. point exploring at in Coast, them. where are this, numbers would down can developments But a buy markets we’re per XXX points points West I all cost more we basis clear, especially those are say wouldn’t something in in look, know escalating we today,

new overall a for would that it’s market a work to be think, most So kind demand we’re has it’s likely unique, market us I hotel. and in of the that already in build generation that a opportunity support to a

we now. it think can for I leave that at So

Operator

you. Thank Okay.

no the to in this like have at management queue We I’d questions back turn to further closing any the for time. floor comments.

Jeff Fisher

be everybody’s margin as in on look appreciate RevPar our erosion call. support for on revenue Well, in frankly, moving of continued markets, during continue Overall, these hard environment these performing the everybody to will index particularly for once flat forward on again, we might �� real as here, hotels. the front focus the pretty the to expect. working on numbers. might to us working minimizing other ahead being we and that we’re put opportunities through RevPar as And allow strong well up in that that continue a not We

So with soon. to sign look speaking off that, and forward I’ll

Operator

today’s teleconference. concludes This

time, this for at lines your disconnect may participation. your and thank You you

Chatham Lodging Trust (CLDT) 1 May 192019 Q1 Earnings call transcript