Chatham Lodging Trust(CLDT) - 2025 Q2 - Quarterly Results

Second Quarter 2025 Results Overview Chatham Lodging Trust reports strong Q2 2025 results, exceeding expectations with robust adjusted FFO per share and strategic deleveraging Second Quarter 2025 Key Items Chatham Lodging Trust announced Q2 2025 results, outperforming expectations despite a slight RevPAR decline, achieving the upper end of adjusted FFO per share guidance, and further deleveraging through asset sales | Metric | Q2 2025 | Q2 2024 | Change | | :-------------------------------- | :------------- | :------------- | :--- | | Net Income (Loss) Attributable to Common Stockholders | $3.4 million | $4.9 million | -30.6% | | Diluted Net Income (Loss) Per Share | $0.07 | $0.10 | -30.0% | | RevPAR ($) | $155 | $156 | -0.6% | | GOP Margin (%) | 46% | 46% | 0 bps | | Hotel EBITDA Margin (%) | 39% | 39% | 0 bps | | Adjusted EBITDA ($) | $28.5 million | $31.4 million | -9.3% | | AFFO ($) | $18.5 million | $19.9 million | -7.0% | | Diluted AFFO Per Share ($) | $0.36 | $0.39 | -7.7% | | Common Stock Dividend Per Share ($) | $0.09 | $0.07 | +28.6% | - Q2 2025 RevPAR decreased by 0.4%, outperforming the company's guidance range (decrease of 2% to 0.5%)[4][5] - Hotel GOP margin and Hotel EBITDA margin remained largely flat year-over-year at 46% and 39%, respectively[4][5] - Adjusted EBITDA decreased by $2 million to $29 million, primarily due to the impact of sold hotels[5] - Completed the sale of five low-RevPAR hotels for a total of $23 million, further reducing the debt-to-asset ratio to 21%[5][6] CEO Commentary CEO Jeffrey H. Fisher expressed satisfaction with Q2 performance, highlighting maintained margins despite a slight RevPAR decline, successful asset sales, deleveraging, and a new share repurchase program, anticipating improved business travel demand in Q3 and Q4 and continued outperformance - The company achieved solid operating results in Q2, successfully selling five low-RevPAR hotels, further reducing the debt-to-asset ratio to 21%, and initiating a share repurchase program[6] - Business travel demand is expected to improve in Q3 and Q4, especially in August and September[7] - Seven leisure-driven hotels performed well, with RevPAR increasing by 4% this quarter and 2% year-to-date (excluding the Portsmouth hotel closed for renovation)[7] - The company expects to outperform the industry again in 2025, continuing a three-year trend of outperformance[7] Hotel Performance Analysis Q2 2025 hotel performance shows slight RevPAR decline but industry outperformance, driven by strong market segments and extended-stay contributions Hotel RevPAR Performance In Q2 2025, the company's 34 comparable hotels experienced a slight RevPAR decline but still outperformed the industry, with strong performance in Silicon Valley and San Diego, while Dallas was impacted by a convention center closure, and extended-stay hotels contributed most of the Hotel EBITDA 2025 Q2 Comparable Hotel RevPAR Performance | Metric | Q2 2025 | Q2 2024 | | :------ | :------------- | :------------- | | Occupancy (%) | 82% | 82% | | ADR ($) | $191 | $191 | | RevPAR ($) | $155 | $156 | 2025 Q2 Monthly RevPAR Change | Month | 2025 RevPAR ($) | 2024 RevPAR ($) | YOY Change | | :--- | :----------- | :----------- | :------- | | April | $146 | $153 | (4)% | | May | $156 | $153 | 2% | | June | $164 | $162 | 1% | - The company again outperformed the industry in Q2, maintaining its lead for three and a half consecutive years, with May's ADR and RevPAR reaching record highs and June's ADR near record highs[8] 2025 Q2 Major Market RevPAR Performance | Market | LTM EBITDA Share | Q2 2025 RevPAR ($) | Q2 2024 RevPAR ($) | YOY Change | | :------------- | :------------- | :------------------- | :------------------- | :------- | | 34-Hotel Portfolio | | $155 | $156 | -% | | Silicon Valley | 16% | $154 | $150 | 3% | | Los Angeles | 10% | $165 | $163 | 1% | | Coastal Northeast | 9% | $175 | $183 | (4)% | | Washington D.C. | 9% | $180 | $184 | (2)% | | Greater New York | 8% | $169 | $170 | -% | | San Diego | 7% | $219 | $209 | 5% | | Dallas | 5% | $107 | $118 | (9)% | - Silicon Valley RevPAR increased by 3% due to strong tech-related demand; San Diego RevPAR grew by 5%, benefiting from convention business demand; Dallas performed the worst, with RevPAR declining by 9%, mainly due to the convention center closure[9][10] 2025 Q2 Major Brand RevPAR Performance | Brand (Number of Hotels) | LTM EBITDA Share | Q2 2025 RevPAR ($) | Q2 2024 RevPAR ($) | YOY Change | | :-------------- | :------------- | :------------------- | :------------------- | :------- | | Residence Inn (16) | 52% | $164 | $163 | 1% | | Hilton Garden Inn (3) | 7% | $182 | $183 | (1)% | | Home2 Suites (2) | 7% | $139 | $133 | 5% | | Courtyard (3) | 7% | $117 | $123 | (5)% | | Hampton Inn (2) | 6% | $182 | $184 | (1)% | | Hyatt Place (2) | 6% | $143 | $135 | 6% | | Homewood (3) | 6% | $133 | $136 | (2)% | - Extended-stay hotels contributed approximately 66% of the past twelve months' Hotel EBITDA, and the company has the highest concentration of extended-stay rooms (59%) among all publicly traded lodging REITs[11] Hotel Operations Performance In Q2 2025, the company's hotel GOP margin and Hotel EBITDA margin remained flat year-over-year, while total labor and benefits costs decreased due to workers' compensation program refunds, boosting operating margins 2025 Q2 Hotel Operations Key Metrics | Metric | Q2 2025 | Q2 2024 | | :---------------- | :------------- | :------------- | | RevPAR ($) | $155 | $156 | | Total Operating Profit ($M) | $37 | $40 | | Hotel EBITDA ($M) | $31 | $34 | | GOP Margin (%) | 46% | 46% | | Hotel EBITDA Margin (%) | 39% | 39% | - GOP margin increased by 30 basis points compared to Q2 2024[12] - Total labor and benefits costs decreased by $0.9 million year-over-year (7% per occupied room), primarily due to approximately $0.8 million in workers' compensation program refunds, which improved operating margins by 110 basis points[12][13] Corporate Update and Strategic Initiatives Corporate updates include stable cash flow, successful asset recycling, planned hotel investments, a new share buyback program, and a strengthened capital structure Corporate Financial Performance In Q2 2025, the company's EBITDA and cash flow before debt service decreased year-over-year, but cash flow before capital expenditures remained stable 2025 Q2 Corporate Key Financial Metrics | Metric | Q2 2025 | Q2 2024 | | :------------------- | :------------- | :------------- | | RevPAR ($) | $155 | $156 | | Hotel EBITDA ($M) | $31 | $34 | | Corporate EBITDA ($M) |