Chatham (CLDT) Q1 2026 Earnings Transcript

Motley Fool Transcribing, The Motley Fool Thu, May 7, 2026 at 11:44 PM GMT+7 30 min read CLDT Image source: The Motley Fool. Chairman, President, and Chief Executive Officer — Jeffrey H. Fisher Executive Vice President and Chief Operating Officer — Dennis M. Craven Senior Vice President and Chief Financial Officer — Jeremy Bruce Wegner Jeffrey H. Fisher: Alright, Chris. Thank you very much, and I certainly appreciate everyone joining us here today. It was really a great quarter, obviously, for us on every front, delivering for our shareholders. Given our strong operating results, great acquisition and continued share repurchases, as well as improved outlook for the remainder of the year, we have increased our guidance by approximately 15% since February. On the corporate side, we increased our common dividend by 11% in the first quarter, following a 28% increase in 2025. With a common dividend to FFO payout ratio of only 32%, based on our updated guidance, our dividend is well covered with ample room to continue growing in the future. We will reevaluate the quarterly dividend later this year. Also, we continue to aggressively repurchase shares using free cash flow. Through the end of the first quarter, the company has repurchased 2.2 million shares, or approximately 4% of our common equity, at an average price of $7.04, which equates to a 10% cap rate based on the updated 2026 guidance. At current share price levels, we are trading over a turn lower than our select-service peers’ current EBITDA multiple, which is not reflective of our financial strength or our upward trajectory of our portfolio, especially given the continued strength and increasing strength of our Silicon Valley recovery. We will continue to repurchase shares given the market disconnect. Externally, we have been executing a massively successful recycling campaign over the last couple of years highlighted by the recently acquired portfolio of six high-quality Hilton-branded hotels comprising 589 rooms for $92 million that are immediately accretive to Chatham Lodging Trust’s operating margins, FFO, and FFO per share. The portfolio diversifies our geographic footprint into areas of the country that are benefiting from expanded investments in manufacturing and distribution. The hotels are generally the highest quality properties in their respective markets with an average age of only 10. Sixty-six percent of the portfolio’s rooms are extended stay. The hotels benefit from very favorable labor dynamics and will enhance Chatham Lodging Trust’s already industry-leading hotel EBITDA margins. Performance since closing has been great, with the portfolio producing RevPAR growth of 6% in the first quarter and an even stronger 7% in April. Obviously, we are very excited about this acquisition. Operationally, it was a great quarter for us with RevPAR, hotel EBITDA margins, and hotel EBITDA easily beating our expectations for the quarter. On a comparable basis, our hotel EBITDA grew 5%, and our hotel EBITDA margins gained 135 basis points. Facing difficult comps due to the significant amount of wildfire demand last year in our LA hotels, our RevPAR went from a decline of 5% in January to growth of 1% in February and up 5% in March, finishing the quarter up 1%, which was well above our expectations for the quarter. Silicon Valley led the way with RevPAR growth of 23% in the quarter when you exclude the Mountain View hotel, which was under significant renovation. We experienced broad demand growth across our portfolio, with over two-thirds of our hotels generating RevPAR growth and approximately 25% of our hotels earning double-digit RevPAR gains. I do want to spend a few minutes talking about our largest market, Silicon Valley, since these hotels had an incredible start to the year. Occupancy at our four Silicon Valley hotels was 72%, flat to last year despite our Mountain View hotel being under renovation for the entirety of the quarter, and ADR was up 10% to a post-pandemic quarterly high of $210. Not a first-quarter high, a high mark for all post-pandemic quarters, and our RevPAR of $152 would be the second best quarter over the last six years. These are great results and very encouraging, again, especially considering the renovation at Mountain View during the quarter. For the other three hotels, RevPAR was up double digits in each month of the quarter, finishing the quarter with a strong growth of 23%, as I said, and advancing another 12% in April. As Dennis quoted in the release, demand was up 9% in the first quarter and in April across the entire San Jose–Santa Cruz market. Our hotels did way better than that growth, as our extended-stay Residence Inn hotels, as we have said before, are best suited for the corporate traveler coming to the Valley. RevPAR was up 15% at our San Mateo hotel, and our two Sunnyvale hotels shined with RevPAR up 26% in the quarter. Of course, massive capital investment announcements continue into technology from

Chatham (CLDT) Q1 2026 Earnings Transcript

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Chatham (CLDT) Q1 2026 Earnings Transcript

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