CLDT - Earnings call 3 2023 | Chatham Lodging Trust

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Operator

Good day, and welcome to the Chatham Lodging Trust Third Quarter 2023 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions]. Please note, this event is being recorded. I would now like to turn the conference over to Chris Daly, President of DG Public Relations. ahead. go Please

Chris Daly

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

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

XXXX insight Vice President President Now and and Senior Executive President Officer; Craven, to Operating Chairman, provide Dennis allow Chatham Chief Officer. Fisher, some you Chief Vice Executive on and to third Jeff results, Financial with and introduce Wegner, Jeremy Officer; me Chief quarter

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

Jeffrey Fisher

Texas. It of and of missing meant alone, Valley, an Yes. Bellevue, but were talked approximately difficult and business tech a In on programs know beat, of morning profit. Austin, land. given we've Silicon appreciate with numerous there $X successful the we created and it's $X about times out earnings XXXX morning, of cancellation operating and quarter us. quarter intern in revenue million the quarter the our also a third everyone substantial room Thanks, million was Chris, the the everyone. earnings intern the by comps loss Washington as I in We good given being call this interesting busy unusual morning

layoffs, year, announcing the significant in reshoring hiring Less initiatives. investments time those companies than know, artificial freezes As later, manufacturing tech to X announcing this massive cost-cutting chip we starting were about back months U.S. and started manufacturing intelligence, last all and companies technology of same

noted, plans will in a has XXX,XXX facility facility which build be one $X X state-of-the-art announced square Residence Materials, blocks facility Sunnyvale, innovation chipmakers with previously and Sunnyvale forever in of our a to accounts foot from billion, top ecosystem just As Applied Inns. our X partners. Sunnyvale, collaborative for The universities R&D been

third in travel include those all trends remain Western AMD, encouraging and Some Jose Bellevue, passenger in has of traffic demand and of travel last SFO international Silicon Digital, versus and international and general leveled down hotels, in customers Today, those with XX% up last NVIDIA at At San Valley improved, XX%, down business partners ours. off the SFO, still last XX% much while versus X% big deployments XX% last at XX% SeaTac, at improve year, QX. continues are passengers travel look domestic was At international down domestic XX% are passengers When and XX% down down X year, XXXX Sunnyvale versus occupancy only X% only quarter to down XXXX year. last versus XXXX XXXX. X international to X% the you down are to are the Seattle. XXXX SeaTac, domestic hotels, our in to to year, versus versus

be know, drive occupancy, course, and encouraging able as RevPAR you continually the as the amount forecasting was through that and demand operators hotels, that these owned investing for that X greatest owners technologies. rate evolving, We've and So is companies to intern years, that That year-over-year world's entirety growth be tech-driven and been the hotels, tough means Market will we prospects in of to the to and about for point, are year. to and fourth back these for we exceed certainly of October, the going comps, approximately to And the grow are intern up demand demand come know many strong. isn't next developing at same has quarter. pivotal, levels programs into ultimately very mostly or lodging to change. good growth higher we course, due just of levels. primarily improvement our there. After move those internal back At continue we'll getting some RevPAR XX% get to XXXX

million share just EBITDA per For run $XX over our current hotel a X And XXXX, $X.XX per levels massive rate. million a hotels. incremental FFO still. share, of $XX that's XXXX million projecting EBITDA to as hotel equates from short of we reminder, FFO increase of are That these $XX of over

tech is. to So performance to hotels. gears that ADR impacted, by of quarter you back the than where our the course, upside and was up X% XXXX, down shows XXXX, RevPAR to X%, relative was down Switching was third occupancy less though

X% pandemic. within XX% in over versus Excluding occupancy last last strong been XXXX XX.X% ADR but was was XX% third and up the And of X% occupancy the XXXX. quarter, the X% of the level increase quarter's year would in was from Portfolio June weekday 'XX. XX% over from have $X this highest weekday was since the those year, off XXXX. occupancy quarter Encouragingly, RevPAR down a hotels, up versus or accelerated growth in X last quarter. and X% the $X XX%

was X% $XXX XX% weekday our RevPAR reliance levels. and RevPAR had XXXX compare business, XXXX a in And intern here, want was Weekday the business XXXX. of quarter XXXX. the to over and was performance occupancy when was weekend to Given weekend represented $XXX, and was on $XXX $XXX which weekday we XX% versus and I versus down concentration of XX%. lower increases measures was ADR weekend traveler Both ADR occupancy

X% hotels, year generate Operationally, margins RevPAR year. were XX%, about but was RevPAR as additionally, XXXX. with X hotels about business of and tech-driven requirement again we've the able due this and last the we've from weekday over X%, brunt recover October been variance down to that clean the definitely growth year, lowest should the the week last as move of is specifically differential has before, year intern margin XX% those you our which of quarterly strong So we rooms last as performance loss, the up discussed with to quite noted, was forward. a if as that X% shows which And to portfolio and upside once was abate we

significant generate a over to cash portion cash utilizing million in repay and the and have We maturing our excess $XX continue CapEx to after of dividends the been quarter flow flow debt.

amortizing million $XXX XXXX, or During debt. we repaid maturing of

is $XXX next of remaining million well year we're approximately positioned and to address Our strong XXXX. liquidity, with all and balance sheet debt maturities

be continue though, in-place mindful our We capital acquisitions. to while course, assessing we projections of of opportunities flow external must cost of potential yield and cash pursue growth on growth

that into to growth to investments from and portfolio. more in continue to maturing industry renovation to With be rates, in we growth some believe bunch look Silicon and Bellevue. requirements recovery a external the brands our Valley We'll continued hotels massive becoming us occurring interest fit internal of our focused debt seek the that come add acquire throughout supplement will hotels allow the some that opportunities there'll on rise the significant of as we forward,

dividends. remain we dividend a upon that dividend quarter we pay based reinstatement XXXX will a and As our course, With Dennis. internal operating guidance, don't true-up of our that, at We quarter year, our turn evaluate $X.XX, on continue over $X.XX of dividend basis. currently to on expected quarterly payment projections, and forward-looking our fourth I'd we expect our last stated usage do to NOLs. address it make quarter but for you know, the like we'll of on and Based our to dividend, provide a to fourth I our would want results

Dennis Craven

X Thanks, Jeff. Outside markets everyone. X see Washington, Good markets of growth tech-driven York. Greater Dallas, continue being our of D.C., our New with Los markets, and those RevPAR at morning, Angeles we to top

of continuing The year X% XXXX. last other continues having this is travel were X from big and benefit it the segments, a with across positive after RevPAR growth and markets key year XX% San markets, increases top-performing down Northeast trend. as only our stronger all versus market Dallas coastal to Diego

growth key Washington, RevPAR market in second X% the was our quarter. Our D.C. with best of

see travelers in of these mix a healthy government markets. to business continue and We

of decliners. Although at week as see the October decreases number so or performance. potential week to had or gainers well market Portsmouth first increase a our Lauderdale fees a the we Portland, some government and RevPAR equal Anaheim with RevPAR hotels. leisure Taking small Fort last of that We the as cancellations our and of Destin glimpse Savannah, and at time. saw so did number into an at of our hotels of due September, We shutdown exited quick

we Year-to-date intern to able $X.X $X.X And summer RevPAR third X rate summer $X.X being year market particularly hotels our levels. due during just the we versus year. XX% months, approximately of versus to our a X replace to at Austin the here more and EBITDA XX% Silicon quarter. market intern at which was business, drive and still Valley hotels Silicon the versus off manage Austin year. loss RevPAR we lowest is million is Of We demand month year. of into year, in course, year is to down X% seasonal up a the XX% as which last revenue. over the million down are as be healthy, XXXX RevPAR last the did in lost was approximately last occupancy of XX% that go today, versus was last need pretty the to the levels next again, approximately Valley to with impactful Austin XXXX down sit bit million,

they want hotels of support saw is business country. in average mention about underlying other to Denver hotels average the our Houston XX%. both both steadily which briefly of Some of that double-digit improving I with XX% travel around RevPAR is growth as our at an We thesis, about markets on our

Billerica, Farmington, markets, Tennessee Connecticut. We also saw growth Mass, in and such business double-digit of some Brentwood, as our suburban RevPAR

year, year. $XXX Hills all a labor much with up HomeX the that that economy in hotel, haven't over quarter, year, this XX% RevPAR Woodland market a we but really have the Lastly, which last the produced strikes in mentioned great occurring of hotel impressive lackluster year our been is given this after particularly first

Gaslamp and the the in $XXX in Exeter, our as last Rey by of followed the RevPAR our Our led Hampton for Coming Inn Northeastern another in Garden was Garden residents quarter in which was hotel, $XXX Northeastern top by our well quarter. RevPAR the residents Marina Diego, was in as San our del our had $XXX. Hilton a fifth $XXX, with in quarter X of in Hilton Hampton our at RevPAR in and coming of White hotel, Portland second Portsmouth, had RevPAR Plains hotels

achieved same or the the of achieved comparable the XXXX and Just not post-pandemic hotels and our Tysons X/X ADRs XX of our are our Silicon Bellevue higher XX levels. XX Valley XXXX Markets Minnesota X approximately of hitting RevPAR Bloomington, Houston, quarter of comparable hotel as ADR than quarter certainly than second hotels our our portfolio, our higher XXXX as the high, third as hotels well and resident Corner. XX levels

see pre-pandemic to our than of average continue an We length say, levels. longer XX% approximately

Our Hyatt followed then market, top Garden our led around our our a is in from then the And Taylor in Inn, by $X.X time Swift think, has phenomenon in Pittsburgh, X Portland, top that were this portfolio, of Port bit with Residence which Place has country. Gaslamp GOP Smith, list. of encouraging. seventh which is, Residence And straight made the The rounding out Hilton Bellevue Hampton our hotel tech-driven a quarter. million. by It Inn producers and our our our benefited it quarter first little I allowed for the X

Woodland of the built top the Residences recently missing recently and one were our X mentioned of Hills. Just out Inns and Sunnyvale X, Home

our points hotels the loss year-over-year was for were X approximately programs, basis a XXX interim the primarily year. which tough Year-to-date, operating it of hotels generated those last points versus in prior the XX% portfolio, XXX XX% year of accounted operating XXX to basis of quarter approximately for tech-driven down basis decline of margins, margins The terms With this margins are points. off the year. operating approximately the as

quarter third bit the our in a margins than quarters. other little items onetime some impacted again, adversely that worse So

rose expenses year-over-year basis wage costs by XXX hotels, impacts on and and million. impacted the maintenance They by margins A by inter-related of Valley basis adversely Bellevue, excluding at adverse our hotels. of a mix were approximately XX% business comparable XX to portion As cost commissions X%. basis that margins much benefit-related room points. down hotels. $X.X were Other up also caused approximately increased XX tech-driven XX points Silicon and were Complementary were CPOR food room business impacted occupied transient amount. On hotels. year-over-year up points. or Commissions X XX%, and points by the margins about margins occupied with Marriott that at XX basis up outside impacted expenses, or up by to cost basis unplanned beverage of our up the XX% bringing water related margins We pretty due costs a with per as per of $XXX,XXX couple shifted and million had $X.X revenue XX% same of damage primarily

and complementary F&B baked insurance I summer our into most have results. impacted last As basis escalate think continue fully seasonality in And heard that our rollout lastly, XX wasn't the of margins to costs year-over-year operating points. as

over the about employees September from end as the we the quarter. at seasonality X,XXX of end June and XX employees about XXX reduce for 'XX, bit up Our a of of employee this overstaffing. down year headcount of headcount but third was

is million year. Our for levels. to the renovation approximately over quarter at head $XX With X Hotels. includes expect and spent approximately in That capital we employ the approximately current costs respect count XX% of million $XX down still $X million spend to expenditures, pre-pandemic

first in completed Inn fourth Ray, commence Charleston. Suites have renovation Cherry Embassy year. starting the our innovations of our expected we Garden During our in Homewood to Del we accelerate Courtyard and are quarter, the Hilton Creek, quarter the also Marina Antonio the during the will Springfield the San Hyatt of or and from And date Place, in of after this at start quarter, the the Suites to

that Jeremy. over to it with So turn I'll

Jeremy Wegner

Thanks, Dennis. Good morning, everyone.

Our adjusted $X.XX hotel before was FFO $XX.X EBITDA million. per and was cash QX was EBITDA 'XX million, was flow $XX.X $XX.X share, capital Adjusted million.

seen items, brand the due While standards line our we have generate a to a margin and the were Bellevue on the able number of hotels key and increase hotel EBITDA brands, of of reinstatement inflation on margin we of QX. costs XX.X% the despite of impact margins of in certain to our in QX loss business Valley related XX.X% and from significant in impact interim Silicon GOP

address remains balance to have on our excellent significant plan in condition, debt we progress made Our sheet maturities. and

used rate address with in fact $XX.X to of a of the facility $XXX As Place LTM to our which million liquidity balance of that generally of cash X.X% million end we is area despite quarter mix million loan Hyatt credit million maturities our and $XX debt that residents in through fully have September recovered no the $XX.X issued XXXX to to XXth, provide Chatham's X.Xx, pre-pandemic undrawn capacity and on us and revolving levels. the EBITDA EBITDA below to a matures properties debt is maturities with XXXX. the portion with In $XXX the is approximately weighted QX, in X the loans of of of $XXX was leverage, loan not pre-pandemic the Xx average now net $XX.X which fixed of million remaining significantly We X.X on the cost on million of debt XX-year a debt repay X-year proceeds the million and and Pittsburgh Bellevue.

amount accessing We of XXXX which CMBS proceeds refinance facility preserve portion in us to likely to to first would undrawn are of a market half material a of the maturities, credit our raise consider the enable additional revolving again debt availability. XXXX to

should concludes open provide it the interest guidance $XXX,XXX higher my for this that in the QX. be call. issuance at remind in August, in line Operator, occurred want QX we're you to not the than late While that was questions. This of to please going portion mid approximately do because I debt time, to of expense

Operator

session the At we roster. assemble will begin now [Operator will pause We momentarily Instructions] to time this question-and-answer our

with Our first question Batory comes Oppenheimer. from Tyler

Tyler Batory

me First question hotels. to on start for tech-focused the X

on make Any next million of year-over-year $XX hotels year? those the XXXX about sounds on $XX you short think coming RevPAR QX, talked early You think this shortfall, grow of million up encouraging. do those million $XX How October thoughts can from you that you you EBITDA hotels? levels, can of Do commentary much XXXX? year,

Dennis Craven

listen, too that's to RevPAR hotels able expect know Yes. to Tyler, those XX% peak. I to mean, at last and growth It's we Certainly, certainly preliminary to this are at really the X hear you XX%, morning. line way to of estimate point top where from this year. now we where good from be at are recovery whether we

So to we're not go certainly out there. going

February encouraging saw is intern year, news full preliminary we the the in steam. But this as programs and think still I XXXX. were on of at about

volatile it's market. pretty So a

prepared trends, are underlying about the think as remarks Jeff talked his in good. I

October and December, program of seasonality November, drop of for once and hotels Valley you this middle weekday point, last, of out the see coming at those at slow intern certainly end as X travel Silicon in we healthier. think the is encouraging. September get to off certainly a trend travel those that weeks, were long-term starts towards But to I hotels business the X business for you is the guests as down to general getting here, sit the in November, Bellevue.

Tyler Batory

Okay.

progression, we to to results? then mean, number your be how you like about are looks that QX ongoing. what a like start versus going know the what versus overall to just for and And of remind have December going first, those think November? As disruptive us for November I then I be renovations are looks normal portfolio, seasonal October

Dennis Craven

that gives November that you a drop November terms you then look from at a Seasonality about RevPAR, December off guesstimate think November, October mean, XX% look Dennis XX% I another to drop on November, at month. and what of like so of Yes. as to might October I normal in just almost again. then from if to wise, off look Tyler, this you is December,

little to a of for are lowest it's a an their But have from levels. the part, most going the hotels renovation So impact. bit at perspective,

So impact. hopefully, have won't minimizes the just it be It certainly material. it will displacement, but some

Tyler Batory

then about focus the expense margin and growth, what achieve need RevPAR last margin maintain growth lot to that? from in question and would talk and expectation what And But your margins to Okay. for pieces you're and growth moving some keep for you There's me. to going of you're your if on see investors a expense seeing what's portfolio. flat,

Dennis Craven

I years increase digits Certainly, your think to as of have Listen, are down. coming the mid- upper few pressures I portfolio, to last a margins. the you'd to operating wage see single think

having rev double-digit year you're in a year not increases wage So and out.

So listen, to all wage related it's number. that

thankfully, So little insurance it of in minimum think, much It's everybody have generally inflationary an insurance, jurisdictions We about an year that I wage environment. adjustments. liability statewide have hard terms speaking, or if really seems already bit. been just I not entire obviously, anyways, easing you've a But as a property we're those it's above that's therefore, don't But to heard, mandated and throughout have make has listen, adjustment do the market. tough think, wages, federally there.

certainly single-digit I to be going and there really margins there if growth to RevPAR are getting it's keep challenges think challenging you're out So low up.

Operator

Our next question Maher comes Securities. from B. Riley with Brian

Brandon Stock

stepping Brandon is This for Brian. in

quick me. Just from X things

on the as also it as [indiscernible], correct? that reiterate, though you sounds taking on more holistic view like far you're debt, that to Just a cash enough have is secured even the

Dennis Craven

not I the follow I'm sure question.

Brandon Stock

to mentioned was how in call. the that, confirm just thought debt, Just I I about far wanted thinking earlier as you're it secured as the

Dennis Craven

Yes.

the to maturities the quarter in we debt remaining $XX debt and maturity. issued XXXX XXXX addressing So the start cover million

so address we be that have of debt $XX address again, normally that undrawn with where we additional revolving or everything in credit probably then can to cash but in of cash take revolver down to million so to our want XXXX, hold And there's and we really definitely using capacity matures don't an a cash facility maturities. spot XXXX. we're $XX those maturing whole $XX end. in to balance million we cash of have, quarter We So million use

could or next more on depend year. developments half million probably $XXX some of secured million whether things that. first debt $XXX deploy that, of million, any like mean, would of million the I do capital next debt year. with acquisitions $XX in directionally, half But I assume any to it's $XX secured think million issuance we'll of in we barring to So again I first or $XXX the

Brandon Stock

seeing Greater That's And like it. as Got York. helpful. and growth far as you've D.C. RevPAR in stronger just about then talked doubt New we're that,

just the spillover seeing So confirm a you're you've and to I momentum there's fourth quarter, wanted into market. believe I on if the touched already

cannot I it leave that. So at

Dennis Craven

think about stronger. you've little September I -- a other peers was and our Listen, sluggish of were August that, a think couple July certainly of Yes. probably I little was talked and but September a --

essentially for driven the had X%, portfolio. for hotels, hotels, the you well. we over at compared to growth X%, as entire XXXX, was RevPAR non-tech excluding or RevPAR If up October, look our almost XXXX And X% then X% tech-driven

into about think November So pattern December and September is year end of October certainly I drops that some certainly point. this of going obviously, next at talked Tyler, I RevPAR encouraging, -- think, encouraging and off. as and But for with year, I start to our going obviously, into see start the the the

Operator

over This concludes the question-and-answer to Jeff would any like session. back conference closing remarks. to I for Fisher our turn

Jeffrey Fisher

this our as year, we the continued move to we'll being forward you into Thanks. the into you and and thank on speak year to everybody We improvement appreciate progress soon. morning and end of call looking and next the

Operator

you conference concluded. today's now attending for The has presentation. Thank

may now You disconnect.

Chatham Lodging Trust (CLDT) 2 Nov 232023 Q3 Earnings call transcript