RLJ Lodging Trust (RLJ) 7 Nov 24 2024 Q3 Earnings call transcript

In the recent RLJ Lodging Trust third quarter earnings call, executives discussed the company's resilient performance and strategic initiatives, highlighting growth opportunities and challenges. Here are the key takeaways from the call:

Resilient Performance

RLJ Lodging Trust reported a strong third quarter, with revenue per available room (RevPAR) growth outpacing the industry, demonstrating the robustness of its urban-centric portfolio. This achievement was particularly noteworthy considering the impact of storms late in the quarter. The company's effective expense management further contributed to its solid operating results.

Strategic Initiatives

The company made significant progress on key initiatives, including refinancing all near-term debt maturities, executing attractive interest rate hedges, and completing hotel conversions. These actions position RLJ Lodging Trust well for the future and underscore its commitment to enhancing shareholder returns.

Urban-centric Portfolio Outperformance

The company's urban hotels continue to drive outperformance, with 2.5% RevPAR growth during the quarter. Urban markets, such as Boston, Chicago, and Southern California, achieved mid to high-single-digit RevPAR growth, underscoring the strong positioning of RLJ Lodging Trust's urban-centric portfolio.

Business Transient and Group Performance

Business transient and group segments showed strong performance during the third quarter, with business transient achieving nearly 9% revenue growth over the prior year. The company's efforts to reposition its urban footprint and capture 7-day-a-week demand are paying off, especially in urban lifestyle hotels.

Capital Allocation and Balance Sheet Management

RLJ Lodging Trust demonstrated a disciplined approach to capital allocation, strengthening its balance sheet and adding flexibility through a new term loan and debt maturity extensions. The company also recycled proceeds from non-core asset sales into share repurchases and increased its quarterly dividend by 50%.

Looking Ahead

Despite facing unique challenges, such as Hurricane Milton and the impact of the elections, RLJ Lodging Trust remains optimistic about its outlook. The company's urban-centric portfolio, strategic initiatives, and favorable market positioning are expected to continue driving growth in the future.

In conclusion, RLJ Lodging Trust's third quarter earnings call highlighted the company's resilient performance, strategic initiatives, and positive outlook for the future. The company's focus on its urban-centric portfolio and commitment to enhancing shareholder returns position it well for continued success in the lodging industry.