Chatham Lodging Trust(US:CLDT)2019-02-25 18:15Financial Data and Key Metrics Changes - The overall portfolio RevPAR growth was 4%, exceeding the original guidance range of negative one to up one [5] - Adjusted FFO for Q4 2018 was $18.4 million, a 15% increase from $16 million in Q4 2017, with adjusted FFO per share rising 8.3% to $0.39 [35] - Adjusted EBITDA for Q4 was $28.9 million, up 9.9% from Q4 2017 [36] - The company reported a net loss of $0.2 million or $0.01 per share for Q4 2018, compared to net income of $5.5 million or $0.12 per share in Q4 2017 [33] Business Line Data and Key Metrics Changes - RevPAR growth of 4.1% in Q4 was driven by ADR gains of 1.5% to $161 and occupancy rising 2.4% to 77% [18] - Incremental revenue from parking rate increases generated $1.5 million at 40 comparable hotels [8] - Revenue from room amenity packages added $200,000 in 2018 [8] Market Data and Key Metrics Changes - Silicon Valley contributed 23% of hotel EBITDA, with RevPAR up 0.8% to $165 despite renovations [19] - San Diego RevPAR increased 34%, with downtown Gaslamp Residence Inn achieving a 35% increase to $171 [21] - Washington DC RevPAR declined 1.7%, impacted by renovations and government shutdown [22] - Northeastern Coastal Market hotels saw RevPAR advance over 17%, driven by demand from North Boston gas explosions [24] Company Strategy and Development Direction - The company plans to continue asset sales to fund acquisitions or developments, focusing on value-add opportunities [13] - The strategy includes converting existing space into income-producing assets, such as bars in limited service hotels [15] - The company aims to maintain high operating margins and is focused on maximizing revenue while minimizing margin erosion [12] Management's Comments on Operating Environment and Future Outlook - Management expects RevPAR growth for 2019 to be negatively impacted by various factors, including renovations and tough comparisons from 2018 [11] - The company remains optimistic about maintaining the highest operating margins among REITs [12] - Management noted challenges in labor costs and supply growth in the hospitality sector, projecting continued pressure on wages [59] Other Important Information - The annual dividend is expected to remain at $1.32 per share, representing a 6.1% yield [17] - The company raised approximately $25 million through share plans and has reduced leverage significantly [9] Q&A Session Summary Question: Supply growth trends in the next couple of years - Management indicated that supply growth is expected to remain in the low 2% range, with some upward pressure in 2019 and 2020 [46][48] Question: Details on the Dallas acquisition - The Courtyard Dallas is expected to contribute approximately $3.1 million of EBITDA in 2019, ramping up in 2020 [50] Question: Acquisitions and underwriting deals - The company is still underwriting deals and is focusing on value-add opportunities due to the current market conditions [56][58] Question: Impact of loyalty program merger and data breach - Management stated that there has been no significant impact from the loyalty program merger or data breach on bookings or revenues [76]