On this page of StockholderLetter.com we present the 4/5/2023 shareholder letter from Chatham Lodging Trust — ticker symbol CLDT. Reading current and past CLDT letters to shareholders can bring important insights into the investment thesis.
Chatham Lodging Trust 20 22 ANNUAL REPORT
Chatham Lodging Trust is a self-advised, publicly-traded real estate investment trust focused primarily on investing in upscale extended-stay hotels and premium-branded, select-service hotels. Our high-quality hotels are located in major markets with high barriers to entry, near primary demand generators for both business and leisure guests. Our primary objective is to generate attractive returns for our shareholders through investing in hotel properties at prices that provide strong returns on invested capital, paying meaningful dividends and generating long-term value appreciation. High-Quality Hotels in High-Quality Markets Seattle, WA: 5% New Hampshire: 5% Minnesota: 2% Portland, ME: 4% Denver, CO: 3% Massachusetts: 2% Nashville, TN: 1% Connecticut: 2% Silicon Valley, CA: 15% New York: 7% Los Angeles, CA: 9% Pennsylvania: 3% San Diego, CA: 6% Washington, D.C.: 7% Dallas, TX: 5% Charleston, SC: 3% Austin, TX: 6% Savannah, GA: 3% San Antonio, TX: 3% Destin, FL: 2% Houston, TX: 3% Orlando, FL: 2% Fort Lauderdale, FL: 2% Based on the percentage of hotel EBITDA for the twelve months ended December 31, 2022.
Jeffrey H. Fisher Chairman, Chief Executive Officer and President Dear Shareholder, I hope this letter nds each of our shareholders, interested parties and employees well. 2022 was a year of recovery and positioning for Chatham. Leisure travel remained strong, and the business traveler made a meaningful return during the year, although the comeback from pre-pandemic levels remains in process. Chatham generated the fourth best total shareholder return out of seventeen lodging REITs in 2022. All key nancial metrics achieved meaningful gains during 2022 with RevPAR, adjusted EBITDA and adjusted FFO per share rising 41, 106 and 310 percent, respectively. Cash ow before capital expenditures increased nearly ve-fold, from $12 million in 2021 to $58 million in 2022. Chatham Lodging Trust 1
Given the above, as well as the belief that our high-quality portfolio will generate stronger cash Real Estate Sustainability Benchmark ow returns as business travel continues its assessment, achieving Green Star status and recovery in 2023, we were confident in our a rating 15 percent higher than our peers business and felt it was the appropriate time to reinstate a common dividend to our shareholders in the 2022 fourth quarter. In addition to this 2022 fourth quarter dividend, we intend to pay a regular quarterly dividend for the rst three quarters of 2023 and a higher 2023 fourth quarter dividend suf cient to distribute approximately 100 percent of taxable income. Our full year RevPAR of $124 recovered to 92 percent of 2019 RevPAR of $136, and our macro view is that business travel, including groups, will continue to gain traction in 2023, and leisure travel will remain strong, but some of the white-hot leisure markets of the past couple of years will yield back some RevPAR. Having the highest concentration of extended-stay rooms Some other noteworthy accomplishments in of any lodging REIT at approximately 63 percent, 2022 include: our portfolio will bene t from the business travel Achieved highest RevPAR of select-service REITs in 2022 Drove hotel EBITDA margins 31 percent higher or 900 basis points from 29 to 38 percent Opened the $70 million, 170-suite Home2 recovery and continued use of travel for business and leisure purposes, as well as increased infrastructure spending across the country. As we turn the corner to 2023, we should produce higher RevPAR growth than most given our Suites Woodland Hills, Calif., and acquired the exposure to the steady recovery of the business 111-room Hilton Garden Inn Destin Miramar traveler, especially in our tech driven markets. Beach, FL for $31 million Year-to-date 2022 Silicon Valley RevPAR of $126 Sold four hotels with an average age of 27 years at a cap rate of 2 and 6 percent on 2021 and 2019 NOI, respectively is down 32 percent compared to 2019 RevPAR of $185. Occupancy is getting closer to 2019, off 8 percent to 68 percent versus 74 percent in 2019. Silicon Valley EBITDA was $17 million in 2022, Completed the re nancing of Chatham s still well below 2019 EBITDA of $29 million existing $250 million senior unsecured by approximately 41 percent. International revolving credit facility with a new $260 deplanements at the surrounding San Francisco million senior unsecured credit facility AND and San Jose airports are still well below 2019 a new $90 million unsecured term loan levels, off 22 and 37 percent, respectively. With Improved overall liquidity from $199 million to $376 million during the year Reduced net debt by $82 million, second best among lodging REITs since the start of the pandemic, and reduced overall leverage ratio from 31 to 26 percent 2 Participated for the rst time in the Global 2022 Annual Report COVID travel restrictions easing, we expect international travel to pick up steam as we move through 2023.
Chatham s Brand Composition Chatham s Top Markets 48% Residence Inn 15% Silicon Valley 11% Homewood Suites 9% NH/ME 9% Hilton Garden 9% Los Angeles 7% DC 7% Greater NY 8% Courtyard 7% Hampton Inn 5% 6% San Diego Hyatt Place 6% Austin 4% Embassy 5% Dallas 3% SpringHill 5% Seattle 5% Other 31% Other Based on the percentage of hotel EBITDA for the twelve months ended December 31, 2022 Based on the percentage of hotel EBITDA for the twelve months ended December 31, 2022 In other key tech markets, Seattle 2022 has helped offset signi cant in ationary increases in RevPAR was $125, which represents 87 percent almost all expenses, especially wages, which also of 2019 RevPAR. 2022 EBITDA of $5.2 million is have risen on average approximately 25 percent approximately 85 percent of 2019 levels. Bucking since 2019. Certain companies are still allowing the slow recovery in Silicon Valley and Seattle, employees to work in the of ce less than ve days Austin is performing above 2019 levels. Our a week which should contribute to travel that Residence Inn Austin 2022 RevPAR was up combines business with leisure, and that should 8 percent versus 2019 levels (our TownePlace lead to an average length of stay longer than Suites was not open in 2019), and our two hotels before the pandemic and aid our margins. at the Domain should have a great 2023. Our assets remain in excellent condition, and Supply growth will be minimal for the foreseeable we resumed renovations in 2022 at ve of our future given the high cost of debt and construction hotels. Our 2023 capital expenditure budget is costs, and this tailwind should enable us to approximately $31 million, which includes produce higher RevPAR growth. We have the best renovations at ve hotels that will occur in operating platform to maximize ow-through of the third and fourth quarters so that revenue those incremental dollars, which is going to be displacement is minimized. vital in an operating environment with gradual cost pressures in many areas of our hotel operations. During the fourth quarter, Chatham closed on a new $260 million revolving credit facility, as well Operationally, our margins improved greatly in as a $90 million delayed-draw term loan, which 2022 with hotel EBITDA margins rising from 29 allows us to draw down over the rst six months to 38 percent. We held onto intense cost control of the loan. Including extension options, both mechanisms for much of 2022. Our hotel facilities mature in October 2027. At Chatham s employee headcount remains approximately current leverage level, the borrowing cost under 25 percent below pre-pandemic levels, and this the credit facility is SOFR plus 1.65 percent, and Chatham Lodging Trust 3
 • shareholder letter icon 4/5/2023 Letter Continued (Full PDF)
 • stockholder letter icon 4/2/2024 CLDT Stockholder Letter
 • stockholder letter icon More "REITs" Category Stockholder Letters
 • Benford's Law Stocks icon CLDT Benford's Law Stock Score = 80


CLDT 4/5/2023 Shareholder/Stockholder Letter Transcript:

Chatham
Lodging
Trust
20
22
ANNUAL
REPORT

Chatham Lodging Trust
is a self-advised, publicly-traded real estate investment trust focused primarily on investing in
upscale extended-stay hotels and premium-branded, select-service hotels. Our high-quality
hotels are located in major markets with high barriers to entry, near primary demand generators
for both business and leisure guests. Our primary objective is to generate attractive returns for
our shareholders through investing in hotel properties at prices that provide strong returns on
invested capital, paying meaningful dividends and generating long-term value appreciation.
High-Quality Hotels in High-Quality Markets
Seattle, WA: 5%
New Hampshire: 5%
Minnesota: 2%
Portland, ME: 4%
Denver, CO: 3%
Massachusetts: 2%
Nashville, TN: 1%
Connecticut: 2%
Silicon Valley, CA: 15%
New York: 7%
Los Angeles, CA: 9%
Pennsylvania: 3%
San Diego, CA: 6%
Washington, D.C.: 7%
Dallas, TX: 5%
Charleston, SC: 3%
Austin, TX: 6%
Savannah, GA: 3%
San Antonio, TX: 3%
Destin, FL: 2%
Houston, TX: 3%
Orlando, FL: 2%
Fort Lauderdale, FL: 2%
Based on the percentage of hotel EBITDA for the twelve months ended December 31, 2022.

Jeffrey H. Fisher
Chairman, Chief Executive
Officer and President
Dear Shareholder,
I hope this letter    nds each of our shareholders, interested parties and employees
well. 2022 was a year of recovery and positioning for Chatham. Leisure travel
remained strong, and the business traveler made a meaningful return during the
year, although the comeback from pre-pandemic levels remains in process.
Chatham generated the fourth best total shareholder return out of seventeen lodging
REITs in 2022. All key    nancial metrics achieved meaningful gains during 2022 with
RevPAR, adjusted EBITDA and adjusted FFO per share rising 41, 106 and 310 percent,
respectively. Cash    ow before capital expenditures increased nearly    ve-fold, from
$12 million in 2021 to $58 million in 2022.
Chatham Lodging Trust
1

Given the above, as well as the belief that our
high-quality portfolio will generate stronger cash
Real Estate Sustainability Benchmark
   ow returns as business travel continues its
assessment, achieving Green Star status and
recovery in 2023, we were confident in our
a rating 15 percent higher than our peers
business and felt it was the appropriate time to
reinstate a common dividend to our shareholders
in the 2022 fourth quarter. In addition to this 2022
fourth quarter dividend, we intend to pay a regular
quarterly dividend for the    rst three quarters of
2023 and a higher 2023 fourth quarter dividend
suf   cient to distribute approximately 100 percent
of taxable income.
Our full year RevPAR of $124 recovered to
92 percent of 2019 RevPAR of $136, and our
macro view is that business travel, including
groups, will continue to gain traction in 2023, and
leisure travel will remain strong, but some of the
white-hot leisure markets of the past couple of
years will yield back some RevPAR. Having the
highest concentration of extended-stay rooms
Some other noteworthy accomplishments in
of any lodging REIT at approximately 63 percent,
2022 include:
our portfolio will bene   t from the business travel
    Achieved highest RevPAR of select-service
REITs in 2022
    Drove hotel EBITDA margins 31 percent higher
or 900 basis points from 29 to 38 percent
    Opened the $70 million, 170-suite Home2
recovery and continued use of travel for business
and leisure purposes, as well as increased
infrastructure spending across the country.
As we turn the corner to 2023, we should produce
higher RevPAR growth than most given our
Suites Woodland Hills, Calif., and acquired the
exposure to the steady recovery of the business
111-room Hilton Garden Inn Destin Miramar
traveler, especially in our tech driven markets.
Beach, FL for $31 million
Year-to-date 2022 Silicon Valley RevPAR of $126
    Sold four hotels with an average age of 27
years at a cap rate of 2 and 6 percent on 2021
and 2019 NOI, respectively
is down 32 percent compared to 2019 RevPAR
of $185. Occupancy is getting closer to 2019, off
8 percent to 68 percent versus 74 percent in 2019.
Silicon Valley EBITDA was $17 million in 2022,
    Completed the re   nancing of Chatham   s
still well below 2019 EBITDA of $29 million
existing $250 million senior unsecured
by approximately 41 percent. International
revolving credit facility with a new $260
deplanements at the surrounding San Francisco
million senior unsecured credit facility AND
and San Jose airports are still well below 2019
a new $90 million unsecured term loan
levels, off 22 and 37 percent, respectively. With
    Improved overall liquidity from $199 million
to $376 million during the year
    Reduced net debt by $82 million, second
best among lodging REITs since the start of
the pandemic, and reduced overall leverage
ratio from 31 to 26 percent
2
    Participated for the    rst time in the Global
2022 Annual Report
COVID travel restrictions easing, we expect
international travel to pick up steam as we move
through 2023.

Chatham   s Brand Composition
Chatham   s Top Markets
48% Residence Inn
15%
Silicon Valley
11%
Homewood Suites
9%
NH/ME
9%
Hilton Garden
9%
Los Angeles
7%
DC
7%
Greater NY
8%
Courtyard
7%
Hampton Inn
5%
6%
San Diego
Hyatt Place
6%
Austin
4%
Embassy
5%
Dallas
3%
SpringHill
5%
Seattle
5%
Other
31%
Other
Based on the percentage of hotel EBITDA for
the twelve months ended December 31, 2022
Based on the percentage of hotel EBITDA for
the twelve months ended December 31, 2022
In other key tech markets, Seattle 2022
has helped offset signi   cant in   ationary increases in
RevPAR was $125, which represents 87 percent
almost all expenses, especially wages, which also
of 2019 RevPAR. 2022 EBITDA of $5.2 million is
have risen on average approximately 25 percent
approximately 85 percent of 2019 levels. Bucking
since 2019. Certain companies are still allowing
the slow recovery in Silicon Valley and Seattle,
employees to work in the of   ce less than    ve days
Austin is performing above 2019 levels. Our
a week which should contribute to travel that
Residence Inn Austin 2022 RevPAR was up
combines business with leisure, and that should
8 percent versus 2019 levels (our TownePlace
lead to an average length of stay longer than
Suites was not open in 2019), and our two hotels
before the pandemic and aid our margins.
at the Domain should have a great 2023.
Our assets remain in excellent condition, and
Supply growth will be minimal for the foreseeable
we resumed renovations in 2022 at    ve of our
future given the high cost of debt and construction
hotels. Our 2023 capital expenditure budget is
costs, and this tailwind should enable us to
approximately $31 million, which includes
produce higher RevPAR growth. We have the best
renovations at    ve hotels that will occur in
operating platform to maximize    ow-through of
the third and fourth quarters so that revenue
those incremental dollars, which is going to be
displacement is minimized.
vital in an operating environment with gradual cost
pressures in many areas of our hotel operations.
During the fourth quarter, Chatham closed on a
new $260 million revolving credit facility, as well
Operationally, our margins improved greatly in
as a $90 million delayed-draw term loan, which
2022 with hotel EBITDA margins rising from 29
allows us to draw down over the    rst six months
to 38 percent. We held onto intense cost control
of the loan. Including extension options, both
mechanisms for much of 2022. Our hotel
facilities mature in October 2027. At Chatham   s
employee headcount remains approximately
current leverage level, the borrowing cost under
25 percent below pre-pandemic levels, and this
the credit facility is SOFR plus 1.65 percent, and
Chatham Lodging Trust
3



shareholder letter icon 4/5/2023 Letter Continued (Full PDF)
 

CLDT Stockholder/Shareholder Letter (Chatham Lodging Trust) 4/5/2023 | www.StockholderLetter.com
Copyright © 2023 - 2024, All Rights Reserved

Nothing in StockholderLetter.com is intended to be investment advice, nor does it represent the opinion of, counsel from, or recommendations by BNK Invest Inc. or any of its affiliates, subsidiaries or partners. None of the information contained herein constitutes a recommendation that any particular security, portfolio, transaction, or investment strategy is suitable for any specific person. All viewers agree that under no circumstances will BNK Invest, Inc,. its subsidiaries, partners, officers, employees, affiliates, or agents be held liable for any loss or damage caused by your reliance on information obtained. By visiting, using or viewing this site, you agree to the following Full Disclaimer & Terms of Use and Privacy Policy.