CLDT — Chatham Lodging Trust

Summary of Chatham Lodging Trust Q2 2026 Earnings Call

1. Key Financial Results and Metrics

• Revenue Per Available Room (RevPAR): Increased by 3.3% in Q2, with notable growth in July at 9.7%.
• Adjusted EBITDA: $32.7 million.
• Adjusted Funds From Operations (FFO): $0.48 per share.
• Gross Operating Profit (GOP) Margin: 46.8%, up 60 basis points year-over-year.
• Hotel EBITDA Margin: 40.8%, up 220 basis points year-over-year.
• Occupancy Rate: Increased to 83%, 200 basis points above the portfolio average.
• Total Construction Costs: $45 million for the new Home2 Suites in Portland, Maine.

2. Strategic Updates and Business Highlights

• Acquisitions: Performance of the recently acquired 6-hotel portfolio exceeded expectations, with RevPAR growth of 9% and GOP margins of 49.3%.
• Share Repurchase Program: $3 million repurchased in Q2, totaling over $18 million since inception, representing about 5% of outstanding shares.
• Development Projects: Construction commenced on a new Home2 Suites in Portland, Maine, expected to open in summer 2028.
• Market Dynamics: Strong growth in business travel, particularly from small to medium-sized businesses, is driving demand, with corporate travel reported up 20% to 35% by major airlines.

3. Forward Guidance and Outlook

• 2026 RevPAR Growth: Expected to be between 1.5% to 3%.
• Adjusted EBITDA Guidance: Projected between $99.2 million to $102.3 million.
• Adjusted FFO Guidance: Expected to be between $1.28 to $1.34 per share.
• Q3 RevPAR Growth: Anticipated to increase approximately 4%.

4. Bad News, Challenges, or Points of Concern

• Geopolitical Risks: Ongoing conflict in the Middle East may create near-term volatility and uncertainty in the market.
• Softness in Certain Markets: Declines in RevPAR were noted in convention hotels, particularly in San Diego and Texas, due to a weaker convention calendar.
• Conservative Outlook: The company is adopting a conservative approach for the second half of the year, projecting low single-digit RevPAR growth.

5. Notable Q&A Insights

• Expense Management: Management highlighted effective control over labor and operating expenses, with property insurance costs down about 10% and utilities managed through competitive bidding.
• Asset Disposition Plans: The company is marketing a smaller hotel for sale, with proceeds expected to be used to pay down credit facility debt.
• July Performance Context: Strong July RevPAR growth was partly due to easier comparisons from the previous year, particularly in Silicon Valley, where a pricing decision affected prior performance.
• Transaction Market Outlook: Management anticipates an increase in hotel transactions in the second half of the year as market conditions improve, though no immediate influx of properties for sale is expected.

Overall, Chatham Lodging Trust reported a strong second quarter with positive trends in RevPAR and strategic initiatives in acquisitions and development, while remaining cautious about geopolitical risks and market dynamics.