WEST PALM BEACH, FLA. - Chatham Lodging Trust, a lodging real estate investment trust (REIT) that invests in upscale, extended-stay hotels and premium-branded, select-service hotels, today announced results for the first quarter ended March 31, 2021.
First Quarter 2021 Operating Results
- Portfolio Revenue Per Available Room (RevPAR) – Declined 42 percent to $55, compared to the 2020 first quarter. Average daily rate (ADR) decreased 31 percent to $107, and occupancy dropped 17 percent to 52 percent for the 39 comparable hotels owned as of March 31, 2021. All Chatham hotels have remained open throughout the pandemic.
- April RevPAR was $75 on occupancy of 65 percent and ADR of $117
- Net Income – Improved $30.8 million to net income of $2.7 million from a net loss of $28.1 million in the 2020 first quarter. - Net income per diluted share was $0.06 versus net loss per diluted share of $(0.59) for the same period last year. During the 2021 first quarter, Chatham recognized a gain of $23.8 million related to the sale of the Innkeepers joint venture.
- GOP Margin – Generated positive GOP margins of 30 percent compared to 25 percent in the 2020 fourth quarter and 38 percent in the 2020 first quarter.
- Adjusted EBITDA – Produced positive Adjusted EBITDA for the third consecutive quarter, generating Adjusted EBITDA of $1.2 million versus $0.2 million in the 2020 fourth quarter and $16.5 million in the 2020 first quarter.
- Adjusted FFO – Declined $13.4 million to $(7.1) million. Adjusted FFO per diluted share was $(0.15), compared to $0.13 in the 2020 first quarter.
- Cash Burn Before Capital Expenditures – First quarter 2021 cash burn was $7.6 million versus $9.5 million in the 2020 fourth quarter, $5.1 million in the 2020 third quarter and $12.8 million in the 2020 second quarter. Cash burn includes $2.3 million of principal amortization per quarter.
- Cash Flow Positive – Produced positive cash flow after interest expense and corporate overhead in March for the first time since the beginning of the pandemic. In April, Chatham is expected to produce positive cash flow after all debt service and overhead, reaching that mark the second fastest of all lodging REITs.
“Since RevPAR dipped to $40 in December, we have produced healthy sequential gains in occupancy, ADR and RevPAR through the first four months of 2021,” highlighted Jeffrey H. Fisher, Chatham’s president and chief executive officer. “Leisure travel continues to lead the lodging recovery. Demand remains strongest on the weekend, and we expect leisure demand to remain strong through the summer. Also, there is a bit of business travel coming back into our hotels which is very encouraging at this point.”
“Our meaningful RevPAR gains have been accomplished with very little contribution from our most important market, Silicon Valley, and as business travel comes back in that market, our portfolio will continue to produce meaningful RevPAR gains,” Fisher stated. “Additionally, we expect our coastal Maine and New Hampshire hotels to have huge summers, and since those markets were essentially shut down to inbound travel through mid-July, RevPAR gains should be meaningful. In Los Angeles, specifically Anaheim, Disneyland just opened up on April 30th, and although our Residence Inn has done well through the pandemic with a lot of medical guests, we expect that market and our performance to heat up.”
“Our strong performance is a testament to great portfolio attributes, high-quality, extended-stay hotels and premium-branded, select-service hotels in locations that generate room revenue from diverse demand sources,” Fisher added. “For years, we have touted the benefits of a portfolio such as ours through all phases of a lodging cycle, and our performance certainly proves that. We believed we would reach cash flow breakeven sooner than most other lodging REITs, and with April RevPAR of $75, we expect that we will be positive cash flow after debt service for the month which is incredible news to deliver to our shareholders.
“Chatham will emerge from the pandemic healthier than many of our lodging REIT peers who have burned significant amounts of cash and equity value, and we will be better positioned to be acquisitive and grow FFO in addition to the FFO that will be added with the opening of our Los Angeles development,” Fisher concluded.