Overview of the Company

Chatham Lodging Trust is a real estate investment trust that invests in hotels. The company owns 39 hotels across the United States. A key financial metric for the company is Revenue Per Available Room (RevPAR), which measures the revenue generated per available hotel room.

First Quarter 2024 Financial Performance

In the first quarter of 2024, the company’s total revenue was $68.4 million, up 1.2% compared to the first quarter of 2023. This was driven by a 1.5% increase in same-property RevPAR. However, net loss for the quarter increased to $5.5 million compared to $5.0 million in the same period last year due to higher operating costs and interest expense.

Revenue and Profit Trends

The company’s revenue comes primarily from room rentals, which accounted for 91.3% of total revenue. Room revenue increased 1.3% in the first quarter of 2024 compared to the same period in 2023. Food and beverage revenue declined 11.5% while other revenue sources increased 9.9%.

Despite higher revenue, net loss increased due to more significant increases in operating expenses and interest costs. Key drivers included higher wage expenses and general inflationary pressures.

Strengths and Weaknesses

Key strengths for the company are its geographically diversified portfolio of select-service hotels focused on the business traveler market. Business travel demand is recovering following the pandemic.

However, the company faces cost pressures from inflation and must manage upcoming debt maturities. Nine hotels have mortgages maturing over the next 12 months.

Outlook

Industry projections indicate a modest increase in business travel and lodging demand over 2024. However, uncertainty exists around inflation and consumer spending.

The company expects to meet liquidity needs through cash balances, credit facility availability, and refinancing maturing debts. There is no guarantee favorable refinancing will be available.

Careful management of expenses and debt obligations will be key with uncertainty in the operating environment.

Key Financial Metrics

Debt Profile

The company has $484.5 million of debt outstanding at a 5.5% average interest rate. Over the next 12 months, $309.2 million of mortgage debt matures across nine hotels. Refinancing may prove challenging if credit conditions tighten.