Successful Sale of Hotels
Chatham Lodging Trust completed the sale of 5 hotels for $83 million at a 6% capitalization rate on 2024 NOI levels, which were among the 6 lowest RevPAR hotels in the portfolio.
Share Buyback Program
The Board of Trustees approved a $25 million share buyback plan in May, and approximately 20,000 shares were repurchased during the quarter at a weighted average price of $7.02.
Strong Balance Sheet
The company's leverage was reduced to 21%, and it is projected to generate almost $20 million of free cash flow in 2025 after dividends.
Operational Performance
Second quarter occupancy reached a post-pandemic high of 82% with RevPAR and FFO per share at the top of the guidance range. Additionally, RevPAR growth in May and June led to flat RevPAR for the quarter.
Silicon Valley Market Recovery
The largest market, Silicon Valley, showed recovery to pre-pandemic levels with all 4 hotels reaching 80% occupancy. RevPAR growth at these hotels was 3% for the quarter.
Successful Cost Management
Gross operating profit margins increased by 30 basis points year-over-year, aided by effective expense control and a $800,000 workers' compensation-related refund.
Pittsburgh Performance
Pittsburgh experienced a significant RevPAR growth of 23% in the second quarter, achieving its highest second quarter RevPAR of $161, driven by several special events.