Chatham Lodging Trust Q1 Earnings Call Highlights

Chatham Lodging Trust (NYSE:CLDT) executives said the edifice REIT delivered a stronger-than-expected archetypal quarter, supported by improving request successful Silicon Valley, disbursal controls, a precocious closed acquisition and ongoing stock repurchases.

Chairman, President and Chief Executive Officer Jeff Fisher said the institution has accrued its 2026 guidance by astir 15% since February, citing “strong operating results,” an accretive acquisition and a amended outlook for the remainder of the year. Chatham besides raised its communal dividend by 11% successful the archetypal quarter, pursuing a 28% summation successful 2025. Fisher said the dividend remains good covered, with a communal dividend-to-FFO payout ratio of 32% based connected updated guidance.

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“We volition reevaluate the quarterly dividend aboriginal this year,” Fisher said.

First-quarter results apical expectations

Senior Vice President and Chief Financial Officer Jeremy Wegner said first-quarter edifice EBITDA was $21.4 million, adjusted EBITDA was $18.4 cardinal and adjusted FFO was $0.20 per share. Chatham generated a GOP borderline of 42.2% and a edifice EBITDA borderline of 31.8% successful the quarter.

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Wegner said GOP margins roseate 60 ground points from the prior-year period, helped by disbursal controls. Hotel EBITDA margins accrued by 140 ground points, reflecting some disbursal absorption and $500,000 of spot taxation refunds.

On a comparable basis, Fisher said edifice EBITDA roseate 5% and edifice EBITDA margins improved 135 ground points. RevPAR finished the 4th up 1%, exceeding the company’s expectations, aft moving from a 5% diminution successful January to 1% maturation successful February and 5% maturation successful March. Fisher noted that the institution faced hard comparisons due to the fact that of wildfire-related request astatine its Los Angeles hotels successful the anterior year.

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Executive Vice President and Chief Operating Officer Dennis Craven said Chatham’s labour and benefits costs declined much than 1%, oregon $0.50 per occupied room, successful the quarter. He said the institution besides benefited from little spot security renewal rates and spot taxation refunds, which helped offset an astir 12% summation successful inferior costs astatine comparable hotels.

Silicon Valley betterment drives upside

Executives highlighted Silicon Valley arsenic Chatham’s strongest marketplace during the quarter. Fisher said RevPAR astatine the company’s Silicon Valley hotels accrued 23% erstwhile excluding the Mountain View hotel, which was nether important renovation. Occupancy astatine the 4 Silicon Valley hotels was 72%, level from the anterior twelvemonth contempt the renovation disruption, portion mean regular complaint roseate 10% to $210, which Fisher described arsenic a post-pandemic quarterly high.