Chatham Lodging Belief declares Fourth Quarter 2023 outcomes – Adjusted EBITDA to $20.8m., portfolio RevPAR elevated 2.5 p.c

WEST PALM BEACH, FLA. – Chatham Lodging Belief, a lodging actual property funding belief (REIT) that invests in upscale, extended-stay lodges and premium-branded, select-service lodges, immediately introduced outcomes for the fourth quarter ended December 31, 2023.

Fourth Quarter 2023 Key Objects

• Portfolio Income Per Accessible Room (RevPAR) – Elevated 2.5 p.c to $121 in comparison with the 2022 fourth quarter. Common day by day price (ADR) accelerated 0.5 p.c to $173, and occupancy jumped 2 p.c to 70 p.c for the 39 lodges owned as of December 31, 2023.
• • RevPAR for the Silicon Valley and Bellevue lodges was up 14 p.c over the 2022 fourth quarter.

• • Excluding the Silicon Valley and Bellevue lodges, RevPAR was up 5 p.c over the 2019 fourth quarter.
• Web Loss – Incurred a $11.0 million internet loss relevant to widespread shareholders in comparison with a internet lack of $4.0 million within the 2022 fourth quarter. Web loss per diluted widespread share was $(0.23) versus internet loss per diluted widespread share of $(0.08) for a similar interval final 12 months.
• Resort EBITDA Margin – Generated margins of 31.6 p.c within the 2023 fourth quarter in comparison with 2022 fourth quarter margins of 33.3 p.c.
• Adjusted EBITDA– Rose $0.4 million from $20.4 million final 12 months to $20.8 million within the 2023 fourth quarter.
• Adjusted FFO – Produced AFFO of $9.8 million within the 2023 fourth quarter versus $10.2 million within the 2022 fourth quarter. Adjusted FFO per diluted share was $0.19 in comparison with $0.20 within the 2022 fourth quarter.
• Asset Sale – Bought the Hilton Backyard Inn Denver Tech Middle for about $18 million subsequent to the top of the quarter. An approximate $6 million renovation of the resort  deliberate for 2023 was not accomplished because of the pending sale.

The next chart summarizes the consolidated monetary outcomes for the three months and 12 months ended December 31, 2023, and 2022, primarily based on all properties owned throughout these durations ($ in thousands and thousands, besides margin percentages and per share information):

2023 Highlights

“The lodging {industry} in 2023 was attention-grabbing given the differing RevPAR traits every section skilled with leisure, group and enterprise journey behaving impartial of one another,” defined Jeffrey H. Fisher, Chatham’s president and chief govt officer. “For Chatham, it was fairly the curler coaster, with the start of the 12 months meaningfully impacted by vital layoffs within the know-how sector, adopted by the elimination of internship applications for the summer time, all whereas enterprise journey in most different markets was performing properly. After Labor Day, constructing off the robust enterprise journey undercurrent across the nation, our know-how markets began to achieve traction within the fourth quarter, an encouraging signal as we head into 2024 with momentum.”

Chatham’s 2023 highlights embody:

• RevPAR progress of 6.1 p.c, exceeding {industry} RevPAR efficiency by roughly 25 p.c, regardless of shedding roughly $12 million of intern-related room income (represents virtually 4 p.c of 2022 portfolio room income)
• 25 p.c rise in different division earnings due primarily to continued income enhancement initiatives inside the firm’s parking operation and resort retail markets (mixed progress of 21 p.c)
• Lowered internet debt by $26 million and leverage ratio to 25 p.c from 27 p.c, marking the bottom degree in a decade, primarily based on the ratio of Chatham’s internet debt to funding in lodges, at price
• Repaid $150 million of maturing debt utilizing accessible liquidity and new debt issuances
• Efficiently issued $83 million of fixed-rate debt
• Paid widespread share dividends of $0.28 per share in comparison with $0.07 per share in 2022
• Participated within the World Actual Property Sustainability Benchmark (“GRESB”) for the second time, growing its general rating by 9 p.c from 75 to 82
• • Earned 4 of 5 GRESB Stars and was awarded GRESB’s “Inexperienced Star”

• • Acquired an general rating of 82/100, rating thirty first out of 115 listed corporations within the Americas area, and 2nd in Chatham’s peer group

“Wanting ahead to the upcoming 12 months, we’re inspired by the early traits our lodges are experiencing. Expertise corporations that stick with us are again to rising and investing sooner or later and requiring their staff to be current of their workplaces. We anticipate extra deal circulation in 2024 and we’ve got the monetary flexibility to deal with all upcoming debt maturities, make acquisitions, develop FFO and enhance distributable money circulation,” Fisher added.

Fourth Quarter 2023 Working Outcomes

Fisher highlighted, “We have been happy to beat fourth quarter consensus estimates as we achieved better-than-expected top- and bottom-line efficiency. We have been in a position to mix RevPAR progress of two.5 p.c with a 25 p.c enhance in different working revenue whereas holding departmental bills flat year-over-year on a value per occupied room foundation. This quarter felt extra stabilized than the final six quarters, and year-over-year RevPAR progress accelerated all through the quarter and into January. February RevPAR has been adversely impacted by the extreme climate throughout the nation as heavy rains within the west and heavy rain and snow throughout the center of the nation and the northeast impacted journey. By way of final week, RevPAR is up 2 p.c year-to-date.

“Though Silicon Valley and Bellevue RevPAR restoration has been slower than we hoped, the long run seems to be extremely brilliant with surging investments being made into synthetic intelligence and the processing infrastructure essential to assist these initiatives. Together with our Austin lodges, no different lodging REIT has the publicity to this AI primarily based tech resurgence as Chatham does,” Fisher emphasised.

Resort RevPAR Efficiency

The beneath chart summarizes key resort monetary statistics for the 39 comparable lodges owned as of December 31, 2023, in comparison with the 2022 and 2019 fourth quarters:

The beneath chart summarizes RevPAR statistics by month for the corporate’s 39 comparable lodges (38 lodges in January 2024 after the sale of the Hilton Backyard Inn Denver Tech Middle):

Fisher continued, “Our fourth quarter RevPAR progress of two.5 p.c was virtually double industry-wide RevPAR progress, and as traits normalize for us transferring ahead, we should always proceed to outperform the {industry} given the resurgence of our primarily know-how dependent markets. Relative to 2019, fourth quarter ADR was up 8 p.c which, once more, bodes properly as we transfer forward into 2024 and enterprise journey demand accelerates.

“Weekday and weekend occupancy was up about 100 foundation factors within the fourth quarter versus final 12 months and is down roughly 9 and seven p.c versus 2019, respectively. Conversely, weekday ADR was up over 4 p.c versus 2019, and weekend ADR was up roughly 20 p.c over 2019 ranges.”

RevPAR efficiency for Chatham’s largest markets (markets that account for 5 p.c of resort EBITDA contribution during the last twelve months) is introduced beneath:

“Outdoors of our New York and Los Angeles markets which have been oppositely impacted by renovation comparisons, it was encouraging to see all however one market develop within the fourth quarter and nice that our largest market produced the strongest progress of all our high markets,” said Dennis Craven, Chatham’s chief working officer. “Inside Silicon Valley, the underlying demand is strengthening, and fourth quarter occupancy of 65 p.c was not far off 2019 fourth quarter occupancy of 69 p.c. We anticipate to see continued demand progress in 2024.

“We proceed to observe deplanements into our tech pushed markets. Deplanements into San Francisco have been up 12 p.c over the 2022 fourth quarter and solely down 8 p.c to 2019. At SFO, worldwide deplanements have been solely off 3 p.c versus 2019 ranges. San Jose deplanements stay off about 27 p.c to 2019 ranges. Seattle deplanements are solely off 2 p.c versus 2019 ranges.”

Craven commented additional, “Washington, D.C., is constructing momentum heading into 2024 and nonetheless has significant upside to 2019 ranges. Dallas and Austin proceed to learn from company relocations. San Diego is poised for a powerful 2024 given the rise in giant conventions in 2024, though the latest unhealthy climate resulted within the cancellation of some enterprise in February.”

Roughly 63 p.c of Chatham’s resort EBITDA during the last twelve months was generated from its extended-stay lodges. Chatham has the best focus of extended-stay rooms of any public lodging REIT at 61 p.c.

Fourth quarter 2023 occupancy, ADR and RevPAR for every of the corporate’s main manufacturers, primarily based on the 39 comparable lodges, is introduced beneath (variety of lodges in parentheses):