Chatham Lodging Trust Q1 FY2025 earnings call

• Board of trustees approved a $25 million share buyback plan. - Increased quarterly common dividend by 29% to $0.09 per share, annualized yield over 5%. - Successfully sold five hotels in the fourth quarter, with proceeds of $83 million. - Saw broad RevPAR growth across portfolio, with six of top seven markets seeing growth. - Drove operating margins higher for second consecutive quarter, with other department profit up 5%. - Spent approximately $7 million in CapEx in Q1, substantially completing renovations at certain hotels. - Net debt to LTM EBITDA was 3.6 times, significantly below historical leverage.

In Q1 2025, Chatham Lodging Trust's Hotel EBITDA was $20.8 million, Adjusted EBITDA was $17.9 million, and Adjusted FFO was $0.14 per share. GOP margin was 38.9% and Hotel EBITDA margin was 30.5%. RevPAR grew in six of the top seven markets; for example, RevPAR at four Silicon Valley hotels was up 8% in the quarter. The top five RevPAR hotels in the quarter included Residence Inn Fort Lauderdale with RevPAR of $259, Marina Del Rey Hilton Garden Inn with $199, etc. Excluding tech hotels, RevPAR was still up 4% across the remainder of the portfolio. Leisure hotels generally comprise about 20% of EBITDA on an annualized basis, and their RevPAR declined only 1% in the quarter.

• Q2 2025 guidance: RevPAR 2% to 0.5%, adjusted EBITDA $26.8 million to $28.8 million, adjusted FFO per share $0.32 to $0.36. - Full year 2025 guidance: RevPAR growth flat to 1%, adjusted EBITDA $89 million to $93 million, adjusted FFO per share $0.95 to $1.03. Guidance reflects sales of five assets closed from December to April and timing shift of Easter impacting April RevPAR.

• Economic uncertainty impacting RevPAR growth potential. - Impact of holidays like Passover and Easter on RevPAR, e.g., April RevPAR decline due to these holidays. - Government-related travel being a small portion of portfolio (approx 5% or less), but still having some impact. - Tariffs and cost uncertainties affecting potential development projects like in Portland, Maine. - Volatility in acquisition market with limited pipeline and need for high yields (over 9%) for accretive deals.

Q: Gaurav Mehta asked about capital allocation initiatives, acquisition market, and Portland project.

A: Jeff Fisher said they're looking opportunistically at share buyback and acquisitions, acquisition market has limited pipeline and needs high yields, and Portland project's entitlements process is extended with cost uncertainties.

Q: Ari Klein inquired about trends in April, expense side, and Portland project cost impact.

A: Dennis Craven said April trends were impacted by holidays and government, headcount adjusted due to demand shifts, and Portland project cost impacted by tariffs with uncertain impact.

Q: Jonathan Jenkins asked about international inbound travel exposure and acquisition targets.

A: Jeff Fisher said international exposure is light, and they aim to diversify asset base outside current tech-heavy markets for less cash flow volatility in acquisitions