CLDT · Chatham Lodging Trust

Chatham Lodging Trust’s Q1 2026 results reflect operational resilience and strategic execution amid tough year-over-year comparisons—particularly in January and February—where RevPAR still grew 1% overall to $128 across 39 comparable hotels. The outperformance was led by Silicon Valley (+11% RevPAR, +23% excluding renovation impacts) and the newly acquired six-hotel portfolio (+6% RevPAR to $108), both exceeding underwriting expectations. Margin expansion was robust: GOP margin rose 60 bps to 40% and Hotel EBITDA margin surged 135 bps to 32%, driven by disciplined labor management (1% reduction in labor/benefits per occupied room, excluding new hotels) and favorable property tax and insurance trends. Though net loss widened to $(6.3)M due to the absence of a $7M gain on asset sales in Q1 2025, core operating metrics strengthened meaningfully—Adjusted EBITDA rose $500K to $18.4M and AFFO jumped 12% to $10.1M, with AFFO/share up 18% to $0.20 after adopting peer-consistent treatment of share-based compensation. The $92M acquisition diversified Chatham’s geographic footprint into manufacturing- and distribution-driven markets while upgrading portfolio quality: new hotels average 10 years old (vs. 25-year-old sold assets), carry 66% extended-stay rooms, and delivered 42% Hotel EBITDA margins—significantly above the 27% of disposed assets. Management raised full-year guidance sharply: Hotel EBITDA guidance increased 11% and AFFO/share guidance rose 15%, underscoring confidence in sustained momentum. With $15.6M spent on share repurchases (2.2M shares at $7.04 avg.) and dividend raised to $0.10 (11% increase), capital allocation remains aggressively shareholder-focused. The company maintains conservative leverage (25% net debt/hotel investments) and ample liquidity, positioning it to continue executing its recycling strategy and capitalize on dislocation-driven opportunities.