Good morning, welcome to the Chatham Lodging Trust third quarter 2022 financial results conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Chris Daly, President of Daly Gray Public Relations. Please go ahead. Thank you, Andrew. Good morning, everyone, welcome to the Chatham Lodging Trust third quarter 2022 results conference call. Please note that many of our comments today are considered forward-looking statements as defined by federal securities laws. These statements are subject to risks and uncertainties, both known and unknown, as described in our most recent Form 10-K and other SEC filings. All information in this call is as of November 8th, 2022, unless otherwise noted. The company undertakes no obligation to update any forward-looking statement to conform the statement to actual results or changes in the company's expectations. You can find copies of our SEC filings and earnings release, which contain reconciliations to non-GAAP financial measures referenced on this call on our website at chathamlodgingtrust.com. Now, to provide you with some insight into Chatham's 2022 third quarter results, allow me to introduce Geoff Fisher, Chairman, President, and Chief Executive Officer, Dennis Craven, Executive Vice President and Chief Operating Officer, and Jeremy Wegner, Senior Vice President and Chief Financial Officer. Let me turn the session over to Geoff Fisher. Geoff? Appreciate that. Thanks, Chris. I certainly appreciate everyone joining us this morning for our call. Again, I'm real proud of our results for the quarter, continuing the strong operating trends and certainly continuing the strong flow-through to the bottom line of incremental RevPAR and ADR. RevPAR remained strong in the third quarter, up 34% over the same quarter last year, and importantly, up approximately 1% over the 2019 third quarter, strengthened by strong ADR growth of 6% and offset by lower relative occupancy, though quarterly occupancy of 80% is still an impressive achievement. Sequentially, third quarter RevPAR of $150 was up a meaningful 9% over the second quarter. Finally, the quarter finished strong with September RevPAR up 6% over 2019, the highest monthly growth over 2019 this year. October RevPAR looks strong also with RevPAR only down around 1% compared to 2019. Of course, you start your seasonal downturn as you head into the fall, as normally occurs. Our operating margins were strong again, as I said, this quarter, with same store hotel margins of 50.5%, up 160 basis points over 2019, and produced with only a 1% increase in RevPAR over the 2019 third quarter. Historically, we produced the highest operating margins of all lodging REITs, and our third quarter margins put us right at the top of all our peer companies again. I'm certainly pleased and proud for that kind of result, particularly, as I indicated, with RevPAR up only 1%. Our third quarter adjusted EBITDA and FFO were up substantially, and as a result, we saw a healthy increase in free cash flow, which was almost $25 million in the quarter, up almost 25% over our 2022 second quarter, and up 150% over our third quarter. I'm very pleased with our financial condition, which is extremely healthy as we sit here at our lowest leverage levels in over a decade. Since the start of the pandemic, we have reduced our net debt by approximately 40%, by far the highest reduction of any lodging REIT. We exited our credit facility covenant waiver period during the quarter, and just recently, we successfully refinanced our senior unsecured credit facility and issued a new $90 million term loan, with both facilities now maturing in 2027. With no outstanding borrowings on either facility, we have the flexibility to acquire hotels and/or address or refinance maturing debt over the next couple of years, and we have 24 unencumbered assets that could serve as additional sources of liquidity. Touching quickly on external growth, as I stated, we have the capacity and desire to acquire hotels. As I'm sure you've heard, the transaction market is essentially dormant. Between the significant recent rise in interest rates combined with strong operating results for the industry, there really is a pretty wide bid-ask spread between buyers and sellers. We are looking at deals. We don't expect to announce anything soon. We are certainly looking forward to 2023 because I really do believe that that bid-ask spread will narrow. I believe that there'll be some debt maturities that owners will have difficulty dealing with and refinancing in this market. I also think some of the pressures from the brands should be significant relative to CapEx and deferred CapEx that certainly has occurred over the last few years and during the pandemic. As we previously stated, we do have the ability also to develop another hotel on our parking lot in Portland, Maine, next to our Hampton Inn & Suites there. Certainly, as you'll hear from Dennis, continues to be an unbelievably strong market, and we are working on a development plan that would work in a difficult environment and city to develop in. Turning back to our operations, our portfolio is still recovering due to our reliance on the higher-rated business traveler in certain of our markets. Relative to 2019, September was our best month of the year, and that is primarily due to the surge in business travel that has driven up performance during the week, and we saw that continue into October. Since the week of Labor Day, Tuesday, Wednesday occupancy jumped to 87%, surpassing Friday, Saturday occupancy of 82% over that same period, marking the first time since before the pandemic where prime weekday occupancy has consistently outperformed the weekend. Although November to February begins our seasonally slower period, this trend of gaining weekday occupancies is a good indicator of what business travel might trend towards next year. We continue to push ADRs as much as possible. As a matter of fact, as we look ahead, particularly to next year, we do see, and our operators are seeing and budgeting for continued strong ADR growth. We know that, as I stated earlier, the operator has always produced great flow-through to the bottom line. We're seeing increased demand in many of our primary business travel markets, such as Silicon Valley, Seattle, Dallas, and Austin, and strong group demand also in Dallas, San Diego, and San Antonio from their convention centers. Our macro view is that business travel, including groups, will continue to gain traction next year. I believe leisure travel will remain strong, but some of the white-hot leisure markets of the past couple of years will give some RevPAR back, like we saw with our Destin hotel, which saw RevPAR decline a small 3.7% compared to the 2021 third quarter, but still a slight decline. As this transition occurs over the balance of 2022 and 2023, we will derive the most benefit in changing demand trends as compared to many of our peers who really have become more dependent and reliant on leisure and resort business. Although still down 11% to 2019 levels, Silicon Valley RevPAR has had a good quarter as we benefited from two months of intern demand in the quarter. October RevPAR trended backwards a little bit versus 2019, with RevPAR off about 30%, better than what we experienced before the summer, but still down from September. Air travel into both SFO and San Jose remain well below 2019 levels. At SFO, domestic deployments were down about 25% in the quarter, slightly below the 23% miss in the second quarter, while international deployments improved from down almost 40% to now down about 25%. Similar in San Jose, deployments were off 23% in the third quarter versus down 25% in the second quarter. A slight improvement, but still a lot of room for more improvement going forward. If you look at our Residence Inn in Bellevue, Washington, its October was off 15% to 2019 as its business travel was a bit stronger than the Valley. If you look at deployments there, domestic deployments improved from off 11% in the second quarter to off about 9% in the third quarter. International deployments were off 16% to 2019 in the quarter, which has improved from down 24% in the second quarter. Given its reliance on a return to office international travelers in the longer-term consulting and training business, as we've said, Silicon Valley and Seattle will be a little slower to recover than the rest of the markets, but we can say that our top clients are continuing to travel, were in discussions with us on 2023 travel expectations, including the return of the 2023 intern programs, which at this point, initial indicators seem to be bigger and certainly at higher rates than this year. We're encouraged by the trajectory of these markets and the emergence of the digital nomads that we've talked about traveling back to the Valley, we think will generate incremental new demand over the long term. Our other tech-related market, Austin, is bucking all of these trends with RevPAR up 9% versus 2019 at our Residence Inn. Our TownePlace Suites was not open in 2019. It's new. Versus last year, this is relevant since Austin was an open market relevant to COVID, RevPAR at both hotels was up almost 25% to $150. This market is benefited by strong BT demand and of course, augmented by healthy leisure component. We believe, as I said, the future is bright. People still like to travel, people like to do business in person, and we've got some new travelers to the space, the digital nomad, and the employee who works away from the office will now be asked to come back more frequently. These new travelers will be staying for more than one or two nights. We've got the flexibility, of course, to do that since we are over 60% extended stay hotels, and we think those hotels certainly will be the primary beneficiary of this new added demand. Adding to great top-line performance, of course, is our ability to generate very strong operating margins and thus high flow-through of that top-line growth to the bottom line, which means our free cash flow will grow. Our balance sheet, as I said, is in great shape. I think we're poised to outperform, continue to outperform, and start returning cash to our common shareholders in the near future through the reinstatement of a quarterly dividend. We'll be talking more about that in the ensuing month or so. With that, I'd like to turn it over to Dennis for a little more color. Thanks, Jeff. Compared to 2019, our monthly RevPAR was essentially flat in July and August before accelerating in September. As we talked about on our last earnings call, this quarter marked the return of in-person internships and significant room demand from high-tech companies such as Meta, Apple, eBay, and T-Mobile. Those programs bled off in early September, but having wrapped up our intern programs, our revenue was approximately $13 million in 2022, and that's almost double from our 2019 levels. Taking more of this business was definitely the right decision. That's proven out by pretty big RevPAR index gains at our two Sunnyvale hotels. An added benefit is that our operating margin on this business is very high, as limited room servicing is part of the arrangement. Our operating margins at those five tech-driven hotels in September was over 60%. As Jeff mentioned in his prepared comments, our five tech-driven hotels, the four in Silicon Valley and the one in Seattle, are still well off of 2019 results. We do expect that they will ultimately recover and surpass those levels. They're just going to be a bit slower. As a reminder, in 2019, these five hotels did about $35 million in hotel EBITDA, and they're expected to do around $23 million-$24 million in 2022. Still about 30% off of 2019 with some good internal growth to come. If you look at our portfolio for the quarter excluding Silicon Valley or excluding Silicon Valley and our Residence Inn in Bellevue, our third quarter RevPAR was up 4% versus 2019, with ADR growth of 11% offset by a decline in occupancy of about 7%. Again, taking out those five pretty significant hotels, the portfolio performed really well relative to 2019. Large group and convention business continues its surge, and we've posted gains in all of our convention-related markets, with Dallas and San Diego posting RevPAR gains of 43% and 20% respectively versus 2019, and San Antonio posting a RevPAR gain of approximately 4% versus 2019. Far, the schedules are setting up for a pretty good 2023, and at least there continue to be talks in Dallas about the expansion of its Kay Bailey Hutchison Convention Center in the future without closing any of the convention space. It's merely going to be expansion of that space. That's going to do nothing but attract larger conventions, and given our close proximity to the convention center, should set us up pretty well. During the third quarter, 19 of our comparable hotels generated RevPAR greater than 2019, compared to 17 of our hotels last quarter. Again, a gradual improvement. Weekend travel, which for us averaged just over 85% occupancy in the quarter, continued to outperform our weekday travel, but the gap has continued to compress, due in most part, again, to the business traveler coming back. Weekday occupancy, which is the best indicator of the business traveler, rose to 79% in the quarter, compared to 76% in the second quarter. October weekday occupancy was still healthy at 77%. As Jeff talked about, pretty interesting for us that since that week of Labor Day, our Tuesday, Wednesday occupancy of 87% beat our Friday, Saturday occupancy of 82%. Coinciding with the rising demand, we continued to push our rates and our ADRs throughout the week. Third quarter weekday ADR was $184 versus $175 in the second quarter, and weekend ADR was $193 versus $186 last quarter. October ADR was slightly higher than our September ADR. Our five highest hotels with absolute RevPAR in the quarter were at the top, our Hampton Inn Portland at $285, and then our Hilton Garden Inn Portsmouth at $221, followed by our Foggy Bottom Residence Inn at $206, and then our Residence Inn Gasl amp and Hilton Garden Inn Marina del Rey with RevPAR of approximately $200. Our portfolio did significantly better than the industry, with third-quarter RevPAR growth more than double the industry performance, with outperformance in both occupancy and ADR. Occupancy reached 80%, compared to industry-wide occupancy of 67%. Our growth relative to 2021 versus the industry clearly shows that our portfolio is growing more rapidly than the industry as a whole, with our occupancy ADR and RevPAR growth of 10%, 22%, and 34%, respectively, compared to industry growth of 5%, 11%, and 16%. Our top five absolute occupancy hotels in the quarter were our Hampton Inn Portland, with occupancy of 98%, followed by our Residence Inn New Rochelle, our Hampton Inn Exeter, our Residence Inn White Plains, New York, and then our Homewood Suites in Bloomington, making its first appearance. All five hotels had occupancy exceeding 90%. In our top five hotels with the highest ADR, we're led again by the Hampton Inn Portland, with an ADR of $350, $50 higher than our second-ranked hotel, the Portsmouth HGI. The remainder of our top five were our Hilton Garden Inn in Marina del Rey, our San Diego Gaslamp Residence Inn, and then our Residence Inn Mountain View, all three with ADRs over $235. We continue to see an average length of stay longer than our historical levels, which is consistent with Jeff's comments regarding today's traveler staying longer in our hotels. Our average length of stay at both the Residence Inn and Homewood Suites brands still remains about 20% higher than pre-pandemic levels. For the quarter, total hotel revenue of $88 million was up 37% compared to last year's revenue of $64 million, and we were able to generate incremental GOP of almost $19 million for flow through of a very strong 65% on that increased top line. Certainly, revenue growth doesn't mean nearly as much if you can't push it through. We've seen several of our peers who saw margins decline relative to 2019. Our margin growth is based on our entire comparable portfolio, and our same-store third-quarter operating margins surpassed 50%, and we're up 160 basis points over the 2019 third quarter. It's pretty impressive to be able to achieve that kind of margin growth on a 1% increase in RevPAR. We've certainly been able to produce meaningful growth in pretty high margins, given where we are in our RevPAR recovery. A good bit of this increase is attributed to a more efficient operating structure, especially with respect to labor. Our employee headcount remains down about 20% compared to pre-pandemic levels. Certainly, like many, we're a little bit understaffed out there. We're making up for it in terms of with casual labor and efficiencies. We certainly believe, at least on a long-term basis, there will be a permanent headcount reduction. Obviously, everybody knows the pressures we've seen with labor rates over the last few years. On a per occupied room basis at our comparable hotels, our costs were approximately $33, a decline of about $2, or about 5% relative to 2019. During the quarter, all our hotels generated positive hotel EBITDA and GOP. Our top five producers of GOP in the quarter were our Gaslamp Residence Inn, which was also the highest producing GOP hotel in the first and second quarter, followed by our Silicon Valley II Residence Inn, and then our Residence Inn Bellevue, Washington. Lastly, in fifth, was our Hampton Inn Portland in terms of gross GOP production. The fact that three of our top five hotels are tech-driven hotels serves as a reminder of the upside that is underpinning those hotels as the markets recover. All five of our tech-driven hotels were in the top nine producers of GOP in the quarter. If you actually look at the 36 comparable hotels compared to 2019, our third quarter hotel EBITDA was about 105% of the third quarter of 2019, a great result. Looking at our recent acquisitions and our development, all four hotels were in the top 20 producers of GOP, and as a group, generated RevPAR of $153 in the quarter, above our portfolio average of $150. Margins at the four hotels were encouraging, with our two Austin hotels generating operating margins of 54%, and our Home2 in Woodland Hills of 44%, followed by our HGI Destin at 39%. On the CapEx front, the company incurred capital expenditures of $3 million in the quarter. During the fourth quarter, we are going to commence renovations at three hotels, our Residence Inns in Washington, D.C., White Plains, New York, and Hauppauge, New York, with total spend for those three renovations going to be approximately $11 million, and we've already incurred about half of that in advance of commencement of the renovations. With that, I'll turn it over to Jerry. Thanks, Dennis. Good morning, everyone. Chatham's Q3 2022 RevPAR of $150 represents a 34% increase versus our Q3 2021 RevPAR of $112 and was up 1% from our Q3 2019 RevPAR of $149. This excellent top-line performance was driven by exceptionally strong leisure demand, unprecedented levels of summer intern business at our Silicon Valley and Bellevue hotels, and a continuing recovery of business transient demand, which really picked up after Labor Day. While we expect business transient demand to continue to improve in Q4, overall RevPAR levels in Q4 relative to Q4 2019 are unlikely to match our Q3 growth of 1% versus 2019, given the check-out of the tech-related intern business and the seasonality of the leisure travel in our portfolio. In addition to the exceptional top-line results, Chatham was also able to generate outstanding margins in Q3. Chatham's Q3 hotel EBITDA margins of 43.6% are among the highest in the sector and were 240 basis points higher than our margins in Q3 2019. We were able to achieve this significant increase in margins despite RevPAR only being $1 higher than in Q3 2019. While we're starting to see costs increase, we believe continued growth in RevPAR should help offset the potential impact on margins. Our Q3 2022 hotel EBITDA was $38.2 million, adjusted EBITDA was $35.1 million, adjusted FFO was $0.50 per share, and cash flow before capital, which represents hotel EBITDA less corporate G&A, cash interest, and $2.2 million of principal amortization, was positive $24.6 million. Over the last two years, Chatham has taken a number of steps to strengthen its balance sheet, and as a result, we now have the lowest leverage and most liquidity that we've ever had. In late October, we replaced our $250 million revolving credit facility that was scheduled to mature in 2023 with a $305 million credit facility that consists of a $215 million revolving line of credit and a $90 million delayed draw term loan. Including all extension options, the new revolver and term loan have final maturities in October of 2027. The revolver and term loan are both currently completely undrawn, and we intend to draw the $90 million term loan in the first half of 2023 and use the proceeds to repay the majority of the $112 million of debt we have maturing in 2023. With our reasonable leverage, solid liquidity, strong operating performance, sizable portfolio of unencumbered hotels, and meaningful free cash flow, we are well positioned to refinance our remaining debt maturities when needed. This concludes my portion of the call. Operator, please open the line for questions. We will now begin the question-and-answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you'd like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question comes from Ari Klein with BMO Capital Markets. Please go ahead. Thanks, and good morning. Can you talk a little bit about the trends you're seeing in Silicon Valley post the intern business and what you're seeing from a demand standpoint from the larger tech companies out there, given some of their challenges and with some of them said to be clamping down on non-essential travel? Yeah, Ari, this is Dennis. I'll start, and anybody else can chime in. I think as we talked about, October RevPAR was off about 30% compared to 2019, certainly down from the third-quarter levels. We do know that our tech-driven clients out there that we do most of our business with are still doing business and are still generating room demand in our hotels and in the market. It's just not at the level compared to what it was from Memorial Day to Labor Day. It's still out there. It's not as intense. ADRs are still doing pretty well relative to 2019 and 2021. Obviously, still down, but there isn't a major drop-off compared to what we were getting. I'd say it's there. It's just not as intense. I think as normal, we're about to hit the slow season in both Silicon Valley and Bellevue from really the second week of November through the middle of February. Not expecting a ton between now and then in terms of relative to what we saw pre-pandemic. Thanks. Then maybe on the margin front, there was some good progress there. Are there any significant incremental costs that you still expect to bring back? Could you provide some color on what you're seeing from a labor cost standpoint? Yeah, there's not a ton. We've been operating at this minus 20% headcount reduction for the better part of the last six months. As I said in my prepared comments, I still think we're a little understaffed out there. You do have Marriott came out with updating their cleaning standards from an options standpoint. We'll need to bring a little bit back for that. We're entering the slower months of the season as well, we're not in a rush to bring back headcount in that respect. I think for the most part, we're in a pretty good position for the next four or five months until things start to ramp back up. I think we're going to be good at least from an employee perspective for a good bit. Got it. Just following up, just how are you thinking about employee costs year-over-year into 2023 on a like-to-like basis? Our year-to-date run rate is about +7% or +8% in terms of wage per hour across our portfolio, which is down from 10% the last couple of years. Obviously, 2020 is kind of thrown out, but we were experiencing mid-single-digit increases leading into the pandemic. It's a little bit down from our year-to-date increase last year. I think as we move into 2023, we would still expect wages to be up in that middle single-digit area going into 2023. Great. Thanks for all the color. The next question comes from Anthony Powell with Barclays. Please go ahead. Hi, good morning. Just a question on the intern business. I know that you're having, I guess, positive discussions with the clients, I guess right now, but if that were to be shrunk or even eliminated next year, given some of the tech challenges we're reading about, what's the option to backfill that with other business next year? First of all, we don't think it's going to be canceled or anything like that. We've been doing that business for a long time. The only thing that ever stopped it was in 2020 and 2021 with the pandemic. Despite prior recessions and tech downturns, they still did the intern business. They still did group-related business throughout the year in our hotels in terms of demand. I think if we were faced with that challenge, we obviously would have to revert to what we did in the 2020 and 2021, which is get as much business as we can from what we call non-business travel related segments. We don't think there's a huge risk in that. The discussions we've had with the tech companies that we do intern programs with in each of Austin, Silicon Valley, and Bellevue, are pretty confident in what's going to happen next year, and we've already started the discussions with them a little bit earlier than we used to in regards to rates for that business next year, which right now are pretty encouraging. Got it. Okay. Maybe one more on, I guess, the Portland potential development. Could you maybe update us on what a project like that would take to complete in terms of timeframe, targeted returns? I think you talked about it's hard to build in a city. Maybe give some more details there and what you think the overall opportunity is for that project. We think the overall opportunity is great. The Hampton Inn in Portland has been one of our top-performing assets since we bought it a decade ago. The process there is quite time-consuming. We do have and are having active discussions around that project. I think in terms of building it and first of all, getting approval to build it and then building it's probably still a good couple of years off from being open in that market. 2025 is just kind of a good target, you think? Probably so. If you add a cycle a year. All right. Thank you. Yep. The next question comes from Tyler Batory with Oppenheimer. Please go ahead. Hey, thank you. Good morning. First question for me, I really want to dive into trends in the business and what you're seeing. October, I think, down versus 2019, September up 6% with 2019. Just trying to understand the delta there in terms of the performance versus 2019. If you could, remind us seasonality for your portfolio, how you're thinking November and December should shape up compared with 2019. Sure. Yeah, November, we're a week in at the moment, it's a little too early to tell what we're looking like in terms of RevPAR for the full month. It's a little bit down, certainly from an absolute RevPAR perspective, down from October. Usually, our RevPAR, kind of once you get past October, it goes down in November, down further in December, starts building back up January, February into March. Jeremy might have some more detail on just how much that is, and I think he does. Give you the split. Yeah, just a point of reference, like in 2019, our October RevPAR was $146.50. In November, RevPAR was $121.81. In December, it was $97. You see a pretty material drop-off after October. Okay. Great. That's helpful. In terms of the acquisition commentary, I'd imagine perhaps frustrating there aren't more opportunities out there right now to transact. What needs to happen, in your mind, for that bid-ask spread to narrow, and what do you think is the catalyst and the timeline for that as well? I think as I indicated, it's got to come from pressure, and real pressure on owners with deals that really are having to go back to their partners with capital calls. That's generally, in the past, always been sort of the catalyst for deals to happen. Some partners will put up the extra capital, but there's always those deals and those partnerships that don't. Instead they say, "Let's see if we can sell this hotel," or, "Let's sell this hotel." That's when opportunities occur. I don't know the timing exactly. It's hard to predict, but we've positioned our balance sheet purposely to be in good stead and to certainly have the capacity to do it. Now, look, we've got to get some, we have to be clear, really strong returns, and pricing really needs to drop given the environment today and given our multiple, and given where stock trades. There's a variety of different things that need to occur and line up for us to really pull the trigger, because we're not going to do dilutive deals. I think we've been around long enough to understand the math relative to what it takes to really make an acquisition work. Okay. Last question from me on capital allocation. Balance sheet's in great shape. Performance is really strong. Not a whole lot to do on the acquisition front, it sounds like. Where does the dividend fit in here? Kind of what are your expectations? What are you looking at in terms of potentially reinstating a significant payment? Yeah, we are going to reinstate clearly. You keep talking about our cash flow and talking about our flow through. We're finishing for the board some calculations relative to the NOLs, and sort of how that affects overall distribution requirements. I think either Dennis or Jeremy can kind of chime in on this, but we're going to be in a position here in a relatively short period of time to initiate a dividend. The level of the dividend probably, given our conservative nature, should ramp up as visibility ramps up into next year on earnings, right? Yep. Okay, great. Okay, great. That's all for me. Appreciate the detail. Thank you. Yeah. Thanks. All right. Any other questions out there? Just to check, there had been another question. I'll just ask if anyone has a question to please press star then one on a touch-tone phone. Seeing none, I would like to turn the conference back over to Chatham management for any closing remarks. Well, again, I just want to thank everybody for being on the call. To follow the company as we move forward here towards continuing the kind of results we've been able to post and look forward to a continued better year in 2023. Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.