Q3 2024 Chatham Lodging Trust Earnings Call Transcript
Key Points
- Chatham Lodging Trust (CLDT) has entered into contracts to sell five hotels, expected to generate approximately $80 million in proceeds, which will be used to pay down debt and make additional investments.
- The company reported strong liquidity with the lowest leverage levels in over a decade and only $30 million of debt maturing over the next year.
- RevPAR growth continues to exceed industry and peer performance, with a 2.1% increase excluding renovation impacts, compared to the industry's 0.9% growth.
- Chatham Lodging Trust (CLDT) achieved strong GOP margins of 45% and hotel EBITDA margins of 37.1% in Q3 2024.
- The company is well-positioned to benefit from declining interest rates, with significant exposure to floating rate debt, potentially increasing FFO by $2.6 million for every 100 basis points decline in rates.
- Five hotels being sold are among the lowest RevPAR performers in the portfolio, indicating potential challenges in maintaining overall portfolio performance.
- Despite improvements, the recovery of the five tech-driven hotels in Silicon Valley and Bellevue has been sluggish, impacting overall performance.
- Benefit costs increased by 18% in the quarter, adversely impacting margins by approximately 60 basis points.
- Insurance costs have risen by 20% year-over-year, impacting margins by another 20 basis points.
- Utility costs have increased, adversely impacting margins by 20 basis points, indicating ongoing operational cost pressures.
Greetings and welcome to the Chatham Lodging third quarter, 2024 financial results conference call. At this time, all participants are in listen-only mode. The question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad as a reminder, this conference is being recorded. It is now my pleasure to introduce Chris Daly. Thank you, Chris. You may begin.
Thank you, Julian. Good morning, everyone and welcome to the Chatham Lotting Chest third quarter, 2024 results conference call. Please note that many of our comments today are considered forward-looking statements as defined by federal securities laws. These statements are subject to risks and uncertainties both known and unknown as described in our most recent form 10-K and other sec filings. All information in this call is as of November 7th, 2024. Unless otherwise noted and the company undertakes no obligation to update any forward-looking statement to conform the statement to actual results or changes in the
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