CLDT - Earnings call transcript Q1 2024

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Operator

Greetings, welcome to Chatham Lodging Trust First Quarter 2024 Financial Results. [Operator Instructions] Please note, this conference is being recorded. And at this time, I'll turn the conference over to Chris Daly, President of DG Public Relations. Chris, you may now begin.

Chris Daly

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

company's results can expectations. the the to changes You actual or form in statement

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

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

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

Jeffrey Fisher

everyone morning I Monday joining certainly this Chris, Thanks, appreciate and us call. our for

The pricing. by RevPAR enhancing XXXX ] markets almost first Easter rates the increase revenue April the driving through we're that's growth offerings of profits. laser an of or substantially in we free year way the was we [ Xst million line, in and consensus an product quarter, bad our almost know, focused up operating and market increasing first on flow We the with with in other evenly enhanced to our generated or cash and California performance you quarter over increase added increasing into up asset And generating our quarter property $X.X weather greater XX% profits XX% of split together X% as the free quarter, we retail year profit tax increase of above year-over-year operating March right whether departmental estimates combined can, on operation outperformance . From share growth of performance. occupancy a and quarter. refunds management certain X%, February XX% in perspective, beat first hotels. ancillary As than and RevPAR of couple flow line parking cash from other North the Marriott's in last as our American market FFO ADR this between performance The performance. despite industry was RevPAR $X.XX and we in and noteworthy. drove increase Hilton's is we shift and any

gain XX% our we Our tech RevPAR and was of by listed points XXXX. since and at far these to hotels hotels Bellevue, growth saw RevPAR X,XXX occupancy X and at highest Silicon basis Valley by in level the XX%

surging up quarter and was RevPAR in tech hotel down the in Tech Excluding XX% over and off up more tech-driven we're but same April the basis XXX demand news XXXX encouraging RevPAR the with still XXXX by hotels, occupancy with April for X%. up the RevPAR up Even hotel hotels, X first all X% those finished over over seeing XX%, out better X% April points strength news is levels, up X.X%. XXXX hotels only there. levels XXXX RevPAR at levels X% in on was excluding X tech

in in April first continue confident continue. peers we is Silicon that corporate the our XXXX that Within that peers hotels. quarter will we demand Valley, in primarily of reported in the growth to and most thesis have our to our most and we're due April growth saw supports should industry demand tech-driven RevPAR outperform the surging

not about talked meals which to February, [ not we seeing programs We're years. to bookings in something intern room last compression stay. is level the their active, Additionally, generate have stipend cover long we moving is as forward as where tech companies already results. And RevPAR are and so in and to are the year. and a programs. market some year, each intern are many going intern the compression This intern occupancy of companies can as boosts providing overall with intern the the ] choose did to that prior But obviously, at

the is for View single us hotels few at the gained up years. should RevPAR many good market has about our times, Google, digits top and the such the and supply as XX% the next top the and over market is accounts, start too, this in from up Surgical sets with in growth and been our center beneficial Epic corporate showing And is of quarter, meaningful in these long for saw Apple, market, Mountain XX% going. up seeing [ at upper construction strongest hotels X Broadcom from supply future as X%. gains demand term, Sunnyvale market Applied X our is accounts new travel, specifically XX% underlying Intuitive well here, big quarter, ] specifically is ], and as talked we've in the demand business Materials fundamentals. garage up that, Surefox our as Google, we and from very We're Demand [ be

X permanently the San Mateo One Mateo aspect is which Marriott will growth should story stores XXX than its here increase that see Marriott we X% demand as and market, versus closed recently was room other that San increased quarter and well. Silicon XXXX Valley production in the has the some recovered to system RevPAR in the more hotels.

on goal approximate markets. hotels intend of to sold year those redeploying hotels for we $XX the with higher million X in opportunistically was and this quarter, the RevPAR for into cap During and proceeds [indiscernible] costs, to sell renovation some growth We continue Hilton Garden NOI. deferred sold including hotel XXXX higher the an the and

proceeds hotel million, while sell with hotels types respect $XX targets we as acquisition more as hope higher upcoming and buying RevPAR and to targets sales capital this to margin RevPAR to there that volume, developers probably are targeting enhance owners coming of effects of their refinancing cycle Typical higher flow. recycle announced RevPAR meaningful quarter. to and absolute to regular an renovations. cash seeing are I hotels sales higher We're growth, we hotels Acquisition investments, hotels $XXX who CapEx it, from will as going well older have said, related to risk and lower need are these own facing be and margins and to shareholder are With from. that million absolute looking value some deal or the and continuing are some

and owners the like CMBS opportunities additional pretty buy. capacity provide well-capitalized us is and As 'XX debt in we staggering for to the all with levels 'XX maturing of the know, industry for to

Xx. to last a want capital quarter XX% the structure switch quarters, in for as very further a under via raising ratio $XX focus over healthy financial end over are I a the it's of ratio gears are debt-to-EBITDA Chatham's we maturing this leverage end, been meaningful to net to at quarter, IPO. tranche we equity common important We million At highest debt and lowest especially. with cash us over are to increased phases the few Subsequent the leverage to our of the that decade address past enhanced currently our levels critically borrowings under we've year, our flow of through term and our repositioned sales, the combination years our handle growth debt issuance and few balance one free back XXXX dates have sheet since unencumbered, of of XX hotels during the asset a preferred loan. strength, that

in maturing In million we mortgage on well this and debt repaid the July. residence capitalized to $XX million we year. are maturing We April, repay Anaheim, and all $XXX maturing the have

million share our credit my exposure allow me our rate declining tell loan, great what team from the of have $XXX and Let investors, front, put and should has sure this in to it's us this because this I'm and proud and million benefit debt investors about including $XXX interest some been time $XXX floating doing environment million work a the I'm our we've overhang facility rate behind will will we from you, us term future. that sentiment, heard of for on be our to upsized analysts

So confident our of other lodging portfolio hotels. growth tech within well. Chatham think our have of we most performing positioned in peers upside, as is outperform we remainder that is conclusion, REITs especially well most most we The remain the to internal

New be opportunistic across to great less our the X% on than is sheet supply submarkets, front. shape is in and our transaction balance

With turn that, to it I'd like over Dennis. to

Dennis Craven

XX% Thanks, of market XX%. been business RevPAR to to Bellevue, Demand Jeff. addition seeing segments. Silicon the quarter, entirely year growth Within the in XX% tech travel and with all growth in in Valley, our that's as acceleration in was markets, growth are of thriving almost Bellevue occupancy we resident due our in this has almost

office Bytedance TikTok over in the projected X below of corporate XX%. presence X,XXX we the as ] from opened expanded it's ] years. to intends hotel Microsoft, up room Our Mike over building over in its Bellevue Dance accounts Bellevue, our importantly, next XX%. for was segment, more new continue for which to forward in from BT, leases and nights days. X% us, over top very double nights standard and of Sonic the expansion the corporate to is Amazon, supply and all are corporate Bellevue of news outperform. help XX,XXX couple and . In which November, and demand you also accounts in workforce portion and special approximately was is us us quarter surging is employees historically to This room with and X,XXX room welcome employees its X,XXX Bellevue good meaning X,XXX with Amazon for look XX,XXX the retail [ Meta generated than or Toyota market. has office going or nights demand XX or [ a key room up Accenture And

the Some additional from RevPAR tidbits quarter.

as Our of not in of hotels renovation and 'XX. impact X quarter the quarters we first disruption any renovation each first had impacted was 'XX RevPAR with by

XXXX occupancy. highest First pandemic quarter for first the since Deployments. weekend was outpaced occupancy weekday the weekday first the and quarter occupancy time

for X to so on our sure our markets, since the X%. comprise SFO gainers our about first Savannah. airport, X% international Portland. were is domestic seeing inbound traffic XXXX. and traffic Asia And Top -- that destined international deployments approximately of approximately Anaheim into of that surpassed passenger is from travel up XXXX of worst Total We first year-over-year. saw We're monitor hotels were in coming XX% At time RevPAR and up Francisco's oriented revenue in downside, quarter domestic primarily room Outside continue CTech, were the February approximately is San through in region. levels X%. February increase tech-driven our generally March performers XX% most the up

compares gap with in to a for weekend approximately RevPAR occupancy those XX% $XXX $XXX, year. of that of Weekday each outpacing were last and weekend quarter periods $XX gap of first $X weekday the and ADR

top last residents by of $XXX RevPAR flat which hotels with year. RevPAR led Lauderdale X Our were the in to Fort was

Diego Mountain Inn Our and our and that benefits attributable and to White Gaslamp followed $XXX. residents San at View our del comparable Plains, residents basis RevPAR then Rey residents $XXX, margins points. basis renovation at down Marina were being XX the impacted margins XXX D.C. At labor $XXX of Hilton our under Garden with and $XXX both in adversely by New of our points, GOP which by with despite by York, XXX hotels, followed at in in Washington, majority

past quarters. were X a X largest Labor year-over-year. are, On these our CPOR by approximately expenses the far, costs costs, X% which stabilized have months or up over basis,

Our our wages. essentially and first quarter average hourly fourth hourly quarter wage third from unchanged XXXX is

a expenses count Thankfully, the first head markets. ramping were are labor below second employee now, not and up as half XXXX. we easier any quarters levels, quarter pre-pandemic our we we as after our for of still margin brand remains and required other few really XX% talked shortfalls comps supply become will Our housekeeping about about around experiencing the in

of X Fort Inn GOP Sunnyvale Suites followed Embassy million, which residents our heavy top $X.X the quarter and the our X million to producers top Downtown by Inn Residence despite let top portfolio, quarter. tech a rounding in Gaslamp X Our out by renovation under And the were the to Courtyard with X being Dallas Lauderdale, of to in our reach GOP. our third most was of our $X.X were our for our managed in Springfield, ninth Residence led quarter straight

GOP GOP Importantly, looking hotel was into the hotels, GOP was the a of XXX X tech-driven basis over X quarter. GOP Bellevue up XX% up points at first million $X.X hotel and a were up XX%. strong our residence for approximately at in XXXX margins hotels

over or Tech million $X hotel EBITDA almost was XX%. up

of again, So coming these trends out encouraging markets.

EBITDA With XXXX still we to EBITDA in the to XXXX. back or about capital get we million FFO. spent expect approximately $XX quarter million we if levels, respect disclosed, would in previously we've spend As $XX expenditures, $X.XX approximately $XX of over add to million of and

Garden Embassy Suites renovations quarter, Rey, San Suites the completed del Antonio, we Cherry Creek; During in Homewood Place at lastly, our Hyatt our our Inn our in Hilton Springfield, Virginia. and Marina

for planned renovations quarter. have the We second

With turn it over that, Jeremy. I'll to

Jeremy Wegner

Dennis. morning, Good Thanks, everyone.

Our EBITDA generate $XX.X share million FFO of $X.XX. EBITDA was QX QX. adjusted a able $XX We XX.X% hotel per million. to GOP of in XXXX was EBITDA margin XX.X% hotel and margin Adjusted was were and

XXX second While XXXX increases most from margin, seeing half points basis of our in last QX the we QX we large a cost of year. down stabilization our GOP margin was saw the that are of

refunds QX of . to tax received XXXX QX increased $XXX,XXX Our property EBITDA hotel QX versus basis points year. of due this approximately margin XX

excellent and sale made a for maturities. XXXX, we included XX.Xx in we have rate million cap approximately January an plan $X remains million progress of and $XX to Tech sheet the HGI renovation represents debt significant EBITDA X.X%. completed the costs of balance of approximately condition, multiple address which our In Our Denver on of expected

through end $XXX.X a balance term cash which, incremental $XXX that by pro million. unsecured that end week of of was $XX raised with million quarter our $XXX closed our million. $XXX QX total balance together our QX undrawn outstanding million With we Our XX the forma March of and forma debt in cash million, million last at and provide of revolving of $XXX pro of add-on cash the QX loan of forma to $XX.X a liquidity balance proceeds at matures line remaining availability million exceeds $XXX.X pro million under of credit, an over

executing debt will the million We further remaining process of maturities. required are CMBS to reduce our $XX the credit financing, currently facility utilization in of address revolving which

area. financing the in X% expect to to We next month the the in CMBS X.XX% close rates have and

to of Xx fact X.X not the EBITDA which in is As which March fully net pre-pandemic recovered leverage, pre-pandemic significantly Xx, to XX, debt EBITDA generally that the was below our LTM Chatham's despite levels. is has to area

for to Turning QX. guidance

of adjusted X%, EBITDA $XX.X $X.XX. We and X.X% expect of growth $X.XX to to share per RevPAR to adjusted million FFO $XX.X of million

Our and we expense of in $XX of the million QX completed term million the loan of add-on $X.X cash in early reflects May issuance half interest May. guidance $XX assume million CMBS second

QX We interest income of $XXX,XXX. expect approximately

much to and expense Second interest not June quarter in QX do as maturities. run borrowing in May our rates due to for the represent debt QX income interest of and cash higher the July May money balances and are fund

starting This of not line QX to impacted the QX costs margins, call. by much last of of questions. were year. year-over-year begin please of levels half other impacted respect the expect QX be in EBITDA margin XXXX positively we for to and second in XXXX. comparisons lap margins Year-over-year in general, open are until margin that hotel fuller that Operator, million the my concludes With easier in benefits onetime completely we approximately the reflected to staffing EBITDA comparisons $X.X as portion

Operator

today our the first [Operator of Klein line Instructions] Capital from Aryeh question with BMO Markets. And comes

Aryeh Klein

consumer these you seems provide think be Can feeling and seeing to of days? is that more element that you're weekend on consumer more where a little the occupancy what an color little there a low-end driving softness you and dynamics be pressure might

Dennis Craven

pullback. weak other listen, of XXX call Aryeh, same heard [ was this down, in points, really David. think, think consistent while, think bit ]. or had with finally Destin as for And the that markets now that we've into you is 'XX if quarter you the high was the year driven of for I time we back you've would markets business noted, soften. that's Dennis. And really from working listen, about first be basis the as really in about what started I over certain a I a getting you and hotel think that spiked a occupancy those It owners, to first I little And office seen from have expected leisure and 'XX leisure-oriented travel. that Yes, a believe And and into I I talked more is think in see pandemic, essentially would transitioning eventually mean, leisure to we what exposure think saw. travel what by and parts people as I the Savannah and I other Florida as

hotels, X look we think about were talked at destined you worst. our If in I Savannah the

New Anaheim XX%, was and was had Fort importantly X%. outside really, XX%, a Hampshire, Ports down But XX%. up Pittsburgh up was with that, good mix. X% Lauderdale up we of

it's leisure think where kind hotels I are surprising. those really of just specific So not again, to but

Aryeh Klein

And growth still then about it. revenues, on enhance the doing -- Got things other and like there? you're you incremental the What's what see parking just talked a little to bit that opportunity you of kind profit.

Dennis Craven

listen, I broad the think kind year what hotels, tweaking on refer would to include of increases front. surge in Yes. to this we're out At pretty mean, parking of initiatives some March as put we I I certain pricing. our

for days. People X So Swift a days. over are example, for have multiple you or concert X Taylor there

something parking. of You we time, their like should most there most you typically pricing from parking have are do that. And when $XX parking also. Well, changing hotel structures a for lots, around citywide that charge more a night events big perspective, or

got where over to a saying, move X on sure primarily, being really past look but more be we active of we spent within it, The higher?" quick wine stuff the So nimble, more about looking is of thinking other if to time it's there. liquor more able at some trying it, grab from XX not can product to only stuff, a market, within you're our some it beer, as market we've is our little retail side continue offerings months demand pricing on a the lodging still really revenue especially and and focus have front, making the runway well. We really "Hey, parking it's jurisdictions, and in little to at offer being which some to the the perspective

Aryeh Klein

that to and think providing this do the Do interim a the out of previously? terms of that's that, normal? And new program just companies flexibility have size you on year sense then were relative there. you the And the tech the what they are

Dennis Craven

essentially there interns Well, no last year. was

from to year. going be up well it's last So

you're as sit they -- were [indiscernible] less kind many -- different are lodging, overall of and in probably XXXX internal rentals, that, think said of I in think so today, than those -- listen, there's we it's of I is markets, short-term program corporate programs. what whether terms types here just levels Airbnbs the in in something Having apartments, the accommodations housing.

Those, providing that there. control clarify, just been bit little the by by always giving So intern. to a way, it's flexibility the to those more have

be as those. the discussions talked not, and that are in business prepared mentioned we're I the there doing having and market we regular compression companies move programs, But it the other a something these the few intern do ultimately of entire from was seem and as and whether year -- we about our So offerings, programs. remarks the it's we that back in or them are most hotel [indiscernible] any to in summer our to is at all forward into internships. there there are benefit February, And with last having with as should not

Jeffrey Fisher

overall. our The visibility this the relative to on quantity is change part of Jeff. again, means, course, lack a Of

heard. not to those all then we have attract negotiate we We from be being business the be as the know companies sources do we're But if they've with got. will you're are There in to directly markets up. to we have past, coy substantially, up can able the the So to here. will compared different those . folks like not you've We there. know just --

Operator

of B. with question Maher is the from line Bryan next Riley Our Securities.

Bryan Maher

in seeing for a of us for can today, pressures, those the where me and the most relief least you're cost or on Just categories? Jeremy you maybe Dennis, is couple kind the this tell

Dennis Craven

Yes. our really I think not our remarks, I surprisingly, as most listen, think in of mean, talked I markets. across issue about staffing is an prepared much I've of

about California lot large-scale those we've and us whole a wages, I what minimum lot think moment. to really obviously we at there cost sit of markets, going food I impacted of that at heard on respect call things would here a fast in with aren't increases hasn't the worried all. really that in Out are

corporate and really first pure thankfully, our our quarter. you refunds the in real But If just some taxes increases probably from benefited at and if insurance. a look in from you in estate expenses, we general, estate comparable taxes, real basis, at P&L it's look largest property

Jeffrey Fisher

Health insurance is...

Jeremy Wegner

health Yes, insurance.

Dennis Craven

that was like year, Yes. to health last with everyone's continues going be pain insurance there's I in it a about, to which and every mean talk I -- is but seems was -- just the thing increases. double-digit

Jeremy Wegner

And actually for on come side, starting see utilities, there. year-over-year to down costs the positive we're

should So a be little help.

Bryan Maher

is that Do expect all? needle tax Or you at move refunds you? behind that much more pretty the any

Jeremy Wegner

appealing We constantly expect anything, but we're don't assessment.

know. you that we keep pushing. -- reflected we've that everything -- happened that never I know about or has we'll here but we So and mean

Bryan Maher

the that it to you're tell growth? over while. the markets more seen with of me, X, should and say, the is X expecting acquisitions Okay. for? it that on for a likely a Jeff, and for of list let's And you looking for are and we just want in What you capital XX dispositions then looking kind it you're what to market X kind Is it enter? of next, migration? X business maybe maybe criteria last than Can that Is in like the we've most, recycling seems me, be little months

Jeffrey Fisher

on just were we I hotel Denver that very high sell relatively at a We the we that to did. the of kind were deal. ability buttress you're by by encouraged what number number the of Tech were yes, encouraged saying, bidders to think,

the world's renovations look CapEx age of that course, strong plan, So cycle up a hotels. would other COVID. to either that and be take the to that very hard really real we rentals And difference slow recover really have our are or that a of are us think markets since don't There coming XX-year were at caused just lot to a we be strong. of is Those going a left we're the core in population market want where time still because hotels here. what do around was sell. or Any we strong. are them. bought hotel developed more growth a growth we to hotel that And markets was Business upside growth population in the strong that's where

some As you know, most focus year started, older, that see developers where around there's are hotels, business take There's we pipelines, as the maturities getting I our already And we acquisitions and for far. old deals you some be construction few meaning try the a to hotels may new for see shows other that that still country. acquire. older also. these a that of we having be And some They mean, XX% trends brand-new have know that hotels need they own will strength less of the should a hotels we're care deals corporate so our ton or folks related under not of or this out years deals do brand decent some that source that have for or deals are we to part. some that all underway capital recycle of their and because there

Operator

Tyler with of line Oppenheimer. Batory is next question from The the

Jonathan Jenkins

on Jonathan Tyler. is for This

that very versus that how on pass of you me standing out the alone? in Can color that for strength, additional the and kind over and in April, strong. provide some on is and month one maybe with First number expectations RevPAR shifting your Easter impacted takes puts obviously, came

Dennis Craven

Yes. This is Dennis.

essentially we that about, our there for Washington, -- quarter. has saw despite our the well I hotels us. really hotels. of leisure performer. markets, suburban again, with portfolio outside our showed XX% RevPAR BT driven starts general, X as some obviously trends for would area of what it tech has those listen, pretty We've X April being also the hotels in in talked across the up strong think, well I I D.C. growth. Suites New That performed kind But of a most some been encouraging more Embassy in renovation under good got is hotels with think call, for York And did very we

that's, it's really tech strength about, booking hotels see, continue window we're And business Jeff I go out think, we have at just to demand continues hard and as starts So with very -- talked it to pretty very the hopeful and the low the it's with the with that from overall number. do or we is what BT traveler. a moment, aggressive short there just

quarter. really encouraged in on we think by rates So thing we're can in what pretty same start to we see saw I travel May we front. if ramp as good up, And April, especially the here weekday the then hopefully, deliver a

Jonathan Jenkins

Any What's market relative market. or that maybe to your that on Very your gears happen market? thoughts outlook And mentioned? what to you back driving the overall the to on in underperformance Angeles that of helpful. to Okay. switching then Los expectations And XXXX? get needs kind

Dennis Craven

of months, the was strongest Yes. until one was up of X our really markets. I mean, kind it it last

I soft soft quarter a quarter. and had fourth think first it

but an weather-driven of LA talked at market was There that focus. as a of think it's we've Some moment. more travel I ton just about, into of isn't the business the

Rey of Hills a Del talked to first starting quarter. are I and great see as life our had Inn Marina Anaheim think Woodland We about, Residence there, especially our hotels, some we signs

near Warner So it's up travel BT downtown and that Center. into really

Operator

floor like I no time, additional any this to questions. we Jeff have Fisher the turn At back for closing to would remarks.

Jeffrey Fisher

guidance pick the the to side, where certainly attitude think, I Well, are, but second Dennis the of left as and think the thanks, we I'll off as everybody, for for most being taking look we rest the year, up part at just on again. the from saying we quarter And are kind I for the call that of a wait-and-see RevPAR on given the conservative May, remarks, FFO results earnings strength encouraged continue that we to as said and these already by quarter April continue rest for very all in We're we fronts and will the prepared numbers. into Thanks year, through but I to we the might propel to encouraged we've push the company. by of the and very the my envelope, on are see listening. for seen

Operator

concludes This today's conference.

disconnect may your participation. for time. lines you Thank You your this at

Chatham Lodging Trust (CLDT) 6 May 242024 Q1 Earnings call transcript