Chatham Lodging Trust's Q1 2025: Contradictions Unveiled on Acquisitions, Development, and Hotel Performance

Acquisition market conditions and opportunities, Portland development project status, RevPAR expectations, hotel performance trends are the key contradictions discussed in Chatham Lodging Trust's latest 2025Q1 earnings call.



Share Repurchase and Acquisition Strategy:
- Chatham Lodging Trust announced a $25 million share buyback plan, driven by low leverage post-maturity debt and strong stock valuation.
- The company is actively seeking accretive acquisitions, focusing on high-quality premium branded targets to diversify its portfolio and grow shareholder value.

Hotel Performance and Revenue Growth:
- The company experienced a 12% and 25% increase in top line and EBITDA for Q1 compared to budgeted figures, primarily due to strong RevPAR growth in its technology-dependent markets.
- RevPAR increased by 8% in Silicon Valley hotels, with EBITDA jumping approximately 10%, showcasing the strength in tech-driven demand.

Dividend Increase and Capital Allocation:
- Chatham Lodging Trust increased its quarterly common dividend by 29% to $0.09 per share, translating to a 5% annualized yield.
- This increase reflects the company's commitment to enhancing shareholder value, alongside its announced share buyback program.

Asset Sales and Capitalization Rates:
- The company sold five older hotels with an average age of 25 years and a 6% cap rate on 2024 NOI for proceeds of $83 million.
- The high yields obtained from these sales are indicative of the company's strategy to efficiently recycle older assets for growth opportunities.