Chatham Lodging Reports Record Room Rates Amid Strong Q2 Performance
Chatham Lodging Trust (NYSE:CLDT) reported record revenue per available room ($158), a new high for the second quarter, alongside a 22% year-over-year increase in adjusted funds from operations. The company's recent acquisition of six Hilton-branded hotels is performing above expectations with RevPAR up 9%, and occupancy rising to 83%. Profitability improved significantly as gross operating profit margin widened by 50 basis points and Hotel EBITDA margin increased by 220 basis points. Despite the strong performance, Chatham still expects a net loss for the full year due in part to high debt levels of $418 million. The company's reliance on floating interest rates exposes it to potential financial risk as well as geographic concentration risks, with Silicon Valley contributing nearly 17% of its EBITDA. Institutional investors have increased their stake slightly, and short interest remains low at just 2.85%, indicating cautious optimism in the stock. For continued growth, Chatham must balance occupancy gains with pricing power while maintaining strong performance from recent acquisitions into next year.
Tickers: $CLDT
Topics: hotel industry profitability improvement real estate investment trust (REIT) RevPAR growth