WEST PALM BEACH, FLA. – Chatham Lodging Trust, a lodging real estate investment trust (REIT) that invests in upscale, extended-stay hotels and premium-branded, select-service hotels, announced results for the first quarter ended March 31, 2024.
First Quarter 2024 Operating Results
- Portfolio Revenue Per Available Room (RevPAR) – Increased 2 percent to $120 compared to the 2023 first quarter. Average daily rate (ADR) accelerated 1 percent to $171, and occupancy jumped 1 percent to 70 percent for the 38 hotels owned as of March 31, 2024.
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- RevPAR for the Silicon Valley and Bellevue hotels was up 17 percent over the 2023 first quarter.
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- April 2024 RevPAR was up 5 percent over 2023 for the entire portfolio.
- Net Income / (Loss) – Net loss of $5.5 million compared to net loss of $5.0 million in the 2023 first quarter. Net loss per diluted common share was $0.15 versus $0.14 during the 2023 first quarter.
- Hotel EBITDA Margin – Generated margins of 30.8 percent in the 2024 first quarter, up slightly from 2023 first quarter margins of 30.7 percent.
- Adjusted EBITDA – Rose a solid 6 percent to $18.9 million from $17.8 million in the 2023 first quarter.
- Adjusted FFO – Produced adjusted FFO of $7.9 million in the 2024 first quarter, same as the first quarter of 2023. Adjusted FFO per diluted share was $0.16 for both periods.
The following chart summarizes the consolidated financial results for the three-months ended March 31, 2024, and 2023, based on all properties owned during those periods ($ in millions, except margin percentages and per share data):
| Three Months Ended | |||
| March 31, | |||
| 2024 | 2023 | ||
| Net income / (loss) | $(5.5) | $(5.0) | |
| Diluted net income / (loss) per common share | $(0.15) | $(0.14) | |
| GOP Margin | 38.6% | 39.8% | |
| Hotel EBITDA Margin | 30.8% | 30.7% | |
| Adjusted EBITDA | $18.9 | $17.8 | |
| AFFO | $7.9 | $7.9 | |
| AFFO per diluted share | $0.16 | $0.16 | |
| Dividends per common share | $0.07 | $0.07 | |
Jeffrey H. Fisher, Chatham’s president and chief executive officer, emphasized, “We are quite pleased with our strong start to the year, delivering adjusted FFO per share of $0.16, beating consensus estimates as our hotel EBITDA margins outperformed our expectations. RevPAR growth of 2 percent was in the middle of our guidance, and our earnings beat was driven by hotel EBITDA margins exceeding our midpoint by approximately 230 basis points. RevPAR growth easily surpassed industry performance, and our EBITDA margins benefited from a 17 percent increase in other operating department profit and a $0.8 million or 13 percent decrease in property tax expense resulting from refunds on certain hotels.”
“In addition to our operating results, we continue to strengthen our balance sheet with the sale of the 24-year old Hilton Garden Inn Denver Tech Center for $18 million earlier this year while also avoiding a $6 million renovation. At quarter end, our net debt to trailing twelve month EBITDA was a very healthy 4.0 times, and we will continue to opportunistically sell additional assets in 2024 with the intent to redeploy those proceeds into debt reduction and ultimately make higher growth hotel investments,” Fisher highlighted.
Hotel RevPAR Performance
The below chart summarizes key hotel financial statistics for the hotels owned as of March 31, 2024, compared to the 2023 and 2019 first quarter:
| Q1 2024 RevPAR | Q1 2023 RevPAR | Q1 2019 RevPAR | |||
| Occupancy | 70% | 69% | 76% | ||
| ADR | $171 | $170 | $165 | ||
| RevPAR | $120 | $118 | $126 |
The below chart summarizes RevPAR statistics by month for the company’s hotels:
| January | February | March | April | ||||
| Occupancy – 2024 | 61% | 71% | 78% | 83% | |||
| ADR – 2024 | $165 | $167 | $178 | $177 | |||
| RevPAR – 2024 | $101 | $118 | $140 | $146 | |||
| RevPAR – 2023 | $95 | $120 | $139 | $140 | |||
| % Change in RevPAR vs. prior year | 6% | (1)% | —% | 5% |
Fisher continued, “Our first quarter RevPAR growth of 2 percent was 7X industry-wide RevPAR growth, and as we have stated, our portfolio should continue to outperform the industry given the resurgence of our primarily technology dependent markets. RevPAR growth at our five tech hotels in Silicon Valley and Bellevue accelerated 17 percent in the first quarter, and April RevPAR growth at these same hotels remained strong, growing 12 percent.
“Gains in portfolio occupancy are coming from business travel and this is vital to Chatham’s growth trajectory. First quarter weekday occupancy was the highest since 2019 and for the first time since the pandemic, first quarter weekday occupancy outpaced weekend occupancy. Weekday occupancy gained two percent while weekend occupancy slipped two percent. Portfolio ADR improved slightly in the quarter, and we should generate incremental ADR growth as demand in our tech markets expands.”
RevPAR performance for Chatham’s largest markets comprise 70 percent of trailing twelve-month hotel EBITDA (based on EBITDA contribution over the last twelve months) is presented below:
| % OF LTM EBITDA | Q1 2024 RevPAR | Change vs. Q1 2023 | Q1 2023 RevPAR | Q1 2019 RevPAR | |||||
| 38 – Hotel Portfolio | $120 | 2% | $118 | $126 | |||||
| Silicon Valley | 14% | $127 | 12% | $114 | $183 | ||||
| Los Angeles | 10% | $145 | (3)% | $149 | $161 | ||||
| Coastal Northeast | 9% | $93 | 0.3% | $93 | $88 | ||||
| Washington, D.C. | 8% | $132 | 10% | $120 | $128 | ||||
| Greater New York | 8% | $126 | 9% | $116 | $125 | ||||
| San Diego | 6% | $195 | 4% | $187 | $172 | ||||
| Austin | 5% | $123 | (9)% | $135 | $130 | ||||
| Dallas | 5% | $109 | (4)% | $114 | $98 | ||||
| Seattle | 4% | $105 | 40% | $75 | $115 |
“First of all, it is great to see the growth in Silicon Valley and Bellevue as corporate travel demand continues to increase and as a result, leading to occupancy growth of 12 percent over last year to a post-pandemic first quarter high of 67 percent. San Francisco’s airport saw international passenger traffic surpass 2019 levels in February and March for the first time since 2020. ADRs in Silicon Valley and Bellevue rose five percent in the quarter, and as demand approaches 2019 levels, currently 90 percent of 2019, we will have the leverage to push rates higher,” asserted Dennis Craven, Chatham’s chief operating officer. “Excluding Silicon Valley and Bellevue, first quarter RevPAR of $119 exceeds 2019 levels by 3 percent.”
Craven commented further, “Continuing a great trend from the second half of last year, our Greater New York and Washington, D.C., hotels are experiencing meaningful RevPAR gains attributable to strong underlying demand fundamentals. For the first time since the start of the pandemic, RevPAR at our D.C. area hotels has surpassed 2019 levels, and our Greater New York hotel RevPAR has exceeded 2019 for each of the past four quarters. As we stated last quarter, San Diego is poised for a strong 2024 given the increase in large conventions in 2024 and was able to shake-off the impact awful weather had on February conventions to have a solid quarter.
“Among our major markets, Los Angeles is the only market really underperforming expectations as the entire market has been soft. We gained RevPAR market share in our three Los Angeles area hotels during the quarter. The Austin market was expected to soften this quarter after a significant amount of corporate group demand last year,” Craven concluded.
Approximately 64 percent of Chatham’s hotel EBITDA over the last twelve months was generated from its extended-stay hotels, the highest concentration of extended-stay rooms of any public lodging REIT. First quarter 2024 occupancy, ADR and RevPAR for each of the company’s major brands is presented below (number of hotels in parentheses):
| Residence Inn (16) | Homewood Suites (6) | Courtyard (4) | HGI (3) | Hampton Inn (3) | |||||
| % of LTM EBITDA | 48% | 10% | 9% | 7% | 7% | ||||
| Occupancy – 2024 | 72% | 68% | 70% | 69% | 71% | ||||
| ADR – 2024 | $193 | $142 | $158 | $172 | $132 | ||||
| RevPAR – 2024 | $138 | $96 | $111 | $118 | $94 | ||||
| RevPAR – 2023 | $127 | $107 | $110 | $127 | $93 | ||||
| % Change in RevPAR | 9% | (10)% | 1% | (7)% | 1% |
The Homewood and Hilton Garden Inn declines were impacted by renovations.
Hotel Operations Performance
The below chart summarizes key hotel operating performance measures for the three months ended March 31, 2024 and 2023. Gross operating profit is calculated as hotel EBITDA plus property taxes, ground rent and insurance (in millions, except for RevPAR and margin percentages):
| Q1 2024 | Q1 2023 | |||
| RevPAR | $120 | $118 | ||
| Gross operating profit |
The article Chatham Lodging Trust announces First Quarter 2024 results: Adjusted EBITDA rose a solid 6 percent to $18.9m. first appeared in TravelDailyNews International.
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