Welcome to Chatham Lodging Trust first quarter 2024 financial results. At this time, all participants are in listen-only mode. The question-and-answer session will follow the formal presentation. If anyone should require operator assistance during today's conference, please press star zero from your telephone keypad. Please note, this conference is being recorded. At this time, I'll turn the conference over to Chris Daly, President of DG Public Relations. Chris, you may now begin. Thank you, Rob. Good morning, everyone, and welcome to the Chatham Lodging Trust first quarter 2024 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 May 6, 2024, unless otherwise noted, and 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 www.chathamlodgingtrust.com. Now I'll provide you with some insight into Chatham's 2024 first quarter results. Allow me to introduce Jeff 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 Jeff Fisher. Jeff? Thanks, Chris, and I certainly appreciate everyone joining us this Monday morning for our call. As you know, we beat first quarter consensus estimates as we combined RevPAR growth of 2%, together with an almost 20% increase in our other operating profit line and property tax refunds on a couple of our California hotels. We generated free cash flow of $8.3 million in the quarter, up 10% over the 2023 first quarter. From an asset management perspective, we're laser focused on driving free cash flow any way we can, whether that's by increasing revenue or market share, increasing flow-through, or enhancing ancillary operating profits. And in the first quarter, we drove other departmental profits up almost 20% as we increased parking rates in certain markets and enhanced our retail market operation, product offerings, and pricing. The year-over-year increase added $0.01 of FFO to our first quarter performance. The RevPAR increase of 2% was split evenly between occupancy and ADR, and was substantially greater than industry performance, above Hilton's North American performance, and right in line with Marriott's performance. Generating RevPAR growth and outperformance despite the bad weather in February and the shift of the Easter from April last year into March this year is noteworthy. Our RevPAR was boosted by RevPAR growth of 17% at our 5 tech hotels in Silicon Valley and Bellevue, and we saw occupancy gain 1,200 basis points at these hotels to 67%, by far, the highest level since 2019. Excluding the 5 tech-driven hotels, first quarter RevPAR was down 1%, but still up over 2019 levels by 3%. Even better news is the strength we're seeing in April, with RevPAR up 5% over 2023 and up 4% over 2019 levels, with tech hotel RevPAR up 12% in April, and RevPAR for all hotels, excluding those same five high-tech hotels in April, was up 3.6%. Tech hotel occupancy finished at 73%, only 400 basis points off the 2019 levels. More encouraging news on the surging demand out there. April RevPAR growth beats most peers that have reported and supports our thesis that we should continue to outperform the industry and most of our peers in 2024 due to surging demand in our primarily tech-driven hotels. Within Silicon Valley, we're confident that the corporate demand growth we saw in the first quarter in April will continue. Additionally, tech companies are moving forward with their intern programs. This year, many of the companies are providing a stipend to each intern to cover room and meals, and the intern can choose where to stay. We're already seeing some intern bookings, not at the level as prior years, but as we talked about in February, so long as the intern programs are active, that is going to generate compression in the market, which is something we did not have last year, and obviously, compression boosts occupancy and overall RevPAR results. Mountain View is our strongest market in the quarter, up 19%, as we saw meaningful gains in business travel, specifically from our top accounts here, such as Google, Broadcom, and Surefox. Market demand growth has been upper single digits, and long term, the market sets up well for us as new supply is zero. RevPAR at our two Sunnyvale hotels gained 12% in the quarter, and this market, too, is showing good underlying fundamentals. Demand is up 13%, and future supply is up 1%. We're seeing corporate demand from our top accounts, Apple, Google, Intuitive Surgical, and Applied Materials, and specifically from the start of construction at the big EPIC Center, with the garage getting going, and that, as we've talked about many times, should be very beneficial for these two hotels over the next few years. San Mateo RevPAR growth was 6% in the quarter versus 2019, and it's recovered more than the three other Silicon Valley hotels. One aspect to that story is that recently, the 476-room Marriott San Mateo permanently closed its doors, which will increase Marriott system demand in the market, and we should see some increased production here as well. During the quarter, we sold the Hilton Garden Inn Denver Tech for $18 million, and including deferred renovation costs, the hotel was sold for an approximate four cap on 2023 NOI. We intend to continue to opportunistically sell some hotels this year, with the goal of redeploying those proceeds into higher RevPAR and higher growth hotels and markets. Typical sales targets are going to be hotels with absolute RevPAR and lower absolute RevPAR and margins, and probably hotels that are older that need some upcoming CapEx or regular cycle renovations. We're targeting sales proceeds of $40 million-$100 million, continuing to sell these types of hotels while buying, as I said, higher growth, higher RevPAR, and higher-margin hotels will enhance shareholder value and cash flow. With respect to hotel investments, we are seeing more deal volume, and we hope to have an acquisition announced this quarter. Acquisition targets are coming from developers looking to recycle their own capital, as well as owners who are facing some meaningful risk related to refinancing and the effects therefrom. As we all know, the levels of CMBS debt maturing in 2024 and 2025 is pretty staggering for the industry and should provide additional opportunities for well-capitalized owners like us with the capacity to buy. I want to switch gears to address our capital structure, as it's been a critically important focus for us over the last few quarters, especially. At quarter end, we were at the lowest leverage levels in over a decade, with leverage ratio under 25% and a net debt to EBITDA ratio are a very healthy 4x. Subsequent to the end of the quarter, we further enhanced our financial strength, raising $50 million via increased borrowings under our term loan. We currently have 25 hotels that are unencumbered. Over the past few years, through a combination of asset sales, free cash flow, and the issuance of common and preferred equity, we repositioned our balance sheet to handle the meaningful tranche of maturing debt this year, debt that dates back to 2014, during one of Chatham's highest growth phases since our IPO. We are well capitalized to repay all maturing debt this year. In April, we repaid the $29 million maturing mortgage on the Residence Inn Anaheim, and we have $255 million maturing in July. Let me tell you, it's great to put this overhang behind us because we've heard about this for some time from analysts and investors, and I'm proud of the work our team's been doing on this front, and I'm sure our investors will share my sentiment. Including our $260 million credit facility and our upsized $140 million term loan, we have $400 million of floating rate debt exposure that will allow us to benefit from what should be a declining interest rate environment in the future. So in conclusion, we remain confident that Chatham is well positioned to outperform most peers, as we have the most internal growth upside, we think, of most other lodging REITs, especially within our tech hotels. The remainder of our portfolio is performing well. New supply is less than 1% across our submarkets, and our balance sheet is in great shape to be opportunistic on the transaction front. With that, I'd like to turn it over to Dennis. Thanks, Jeff. Within our tech markets, in addition to Silicon Valley, our Residence Inn Bellevue has been thriving this year with RevPAR growth of 40% in the quarter, and that's almost entirely due to occupancy growth of 37%. Demand growth was almost 20% in the Bellevue market, as we are seeing acceleration in all business travel segments. Our standard retail segment, which is BT, room demand was up over 1,800 room nights, or approximately 42%. And importantly, special corporate, meaning our key corporate accounts, was up over 1,800 room nights or 55%. Amazon, Microsoft, Accenture, and ByteDance or TikTok, all of which are historically top accounts for us, generated over 1,500 room nights in the quarter, and demand from Meta and Toyota is surging as we look forward 60 days. In November, Amazon opened a portion of the Sonic building in Bellevue, welcoming more than 1,000 employees, and intends to double its Bellevue workforce from 10,000 to 20,000 employees over the next couple of years. ByteDance has also expanded its office presence in Bellevue with two new office leases, and with supply projected below 1% in the Bellevue market, this corporate expansion is very good news for the hotel and for us, and it's going to help us continue to outperform. Some additional RevPAR tidbits from the quarter:... Our first quarter RevPAR was not impacted by any renovation impact, as we had 3 hotels with no renovation disruption in each of the first two quarters of 2023 and 2024. First quarter weekday occupancy was the highest since 2019, and for the first time since the pandemic, first quarter weekday occupancy outpaced weekend occupancy. Deplanements, we continued to monitor. San Francisco's airport saw international passenger traffic surpass 2019 levels in February and March for the first time since 2020. Total domestic traffic into SFO is up approximately 3%. At Sea-Tac, international deplanements are up approximately 15% through February, and domestic is up about 1%. We're seeing most of that inbound travel is generally coming from the Asia region. Outside of our tech-driven markets, our seven primarily leisure-oriented hotels that comprise approximately 19% of our first quarter room revenue, saw RevPAR increase 1% year-over-year. Top gainers were Anaheim and Portland, and on the downside, our worst performers were Destin and Savannah. Weekday and weekend occupancy were approximately 70%, for each of those periods, with weekday ADR of $173, outpacing weekend RevPAR of $163. That $10 gap compares to a $4 gap in the first quarter last year. Our top five RevPAR hotels were led by the Residence Inn Fort Lauderdale, with RevPAR of $273, which was flat to last year. Our Residence Inn San Diego Gaslamp, at $195, followed by our Hilton Garden Inn Marina del Rey at $167, despite being under renovation, and then followed by our Residence Inn Mountain View at $158, and our Residence Inn Washington, D.C., and White Plains, New York, both with RevPAR of $154. At our 38 comparable hotels, GOP margins were down 120 basis points, with the majority of that attributable to labor and benefits, which adversely impacted margins by 110 basis points. On a CPOR basis, these costs are up approximately 6% year-over-year. Labor costs, which are by far our largest expenses, have stabilized over the past 9 months or 3 quarters. Our first quarter average hourly wage is essentially unchanged from our 2023 third and fourth quarter hourly wages. Our employee headcount remains about 20% below pre-pandemic levels, and we are not experiencing really any labor supply shortfalls around our markets. Thankfully, as we've talked about for a few quarters now, our margin comps will become easier after the second quarter, as we are still ramping up housekeeping and other brand-required expenses in the first half of 2023. Our top five producers of GOP in the quarter were led by our Gaslamp Residence Inn, at $2.5 million, the ninth straight quarter it's led our portfolio, followed by our tech-heavy Sunnyvale II Residence Inn, with $1.5 million of GOP. And third was our Residence Inn, Fort Lauderdale, and rounding out the top five were our Courtyard Dallas Downtown and our Embassy Suites Springfield, which managed to reach our top five despite being under renovation for most of the quarter. Importantly, looking into hotel GOP at our five tech-driven hotels, hotel GOP of $5.3 million was up a strong 22% over the 2023 first quarter. GOP margins for the five hotels were up 110 basis points, and GOP at a Residence Inn Bellevue was up approximately 80%. Tech hotel EBITDA was up almost $1 million or over 25%. So again, encouraging trends coming out of these markets. As we've previously disclosed, if we get back to 2019 EBITDA levels, we would add approximately $16 million of EBITDA or over 30 cents of FFO. With respect to capital expenditures, we spent approximately $10 million in the quarter and still expect to spend about $37 million in 2024. During the quarter, we completed renovations at our Hilton Garden Inn Marina del Rey, our Homewood Suites in San Antonio, our Hyatt Place Cherry Creek, and lastly, our Embassy Suites in Springfield, Virginia. We have no renovations planned for the second quarter. With that, I'll turn it over to Jeremy. Thanks, Dennis. Good morning, everyone. Our Q1 2023 hotel EBITDA was $21 million, adjusted EBITDA was $18.9 million, and adjusted FFO per share was $0.16. We were able to generate a GOP margin of 38.6% and hotel EBITDA margin of 30.8% in Q1. While our Q1 GOP margin was down 120 basis points from our Q1 2023 margin, we are seeing a stabilization of most of the large cost increases that we saw in the second half of last year. Our Q1 hotel EBITDA margin increased 10 basis points versus Q1 2023 due to approximately $800,000 of property tax refunds received Q1 of this year. Our balance sheet remains in excellent condition, and we have made significant progress on our plan to address debt maturities. In January 2024, we completed the sale of the HGI Denver Tech Center for approximately $18 million, which, including expected renovation costs of approximately $6 million, represents an EBITDA multiple of 20.5x and a cap rate of 3.8%. Our cash balance at the end of Q1 was $72.3 million, which together with $50 million of incremental proceeds raised through an add-on to our unsecured term loan that we closed last week, provide a pro forma quarter-end cash balance of $122.3 million. ...With a pro forma cash balance of $122.3 million and $260 million of undrawn availability under our revolving line of credit, our pro forma total liquidity of $382 million exceeds the $281 million of remaining debt outstanding at March 31, that matures in Q2 and Q3 by over $100 million. We are currently in the process of executing $60 million of CMBS financing, which will further reduce the revolving credit facility utilization required to address our remaining debt maturities. We expect these CMBS financings to close in the next month and have rates in the 7%-7.25% area. As of March 31st, Chatham's net debt to LTM EBITDA was 4x, which is significantly below our pre-pandemic leverage, which is generally in the 5.5x-6x area, despite the fact that EBITDA has not fully recovered to pre-pandemic levels. Turning to guidance for Q2, we expect RevPAR growth of 2.5%-4%, adjusted EBITDA of $28.7 million-$30.4 million, and adjusted FFO per share of $0.33-$0.36. Our Q2 cash interest expense guidance of $7.7 million reflects the $50 million term loan add-on we completed in early May and assumes $60 million of CMBS issuance in the second half of May. We expect Q2 interest income of approximately $700,000. Second quarter interest expense and interest income do not represent run rates for Q3 and Q4, as our cash balances are much higher in May and June due to the borrowing of money in May to fund the July debt maturities. With respect to hotel EBITDA margins, in general, we expect year-over-year margin comparisons to be much easier starting in Q3 as we begin to lap the fuller staffing levels and other costs that were not completely reflected until the second half of last year. Year-over-year EBITDA margin comparisons in Q2 2024 are impacted by approximately $1.2 million of one-time benefits that positively impacted margins in Q2 of 2023. This concludes my portion of the call. Operator, please open the line for questions. Thank you. We'll now be conducting a question-and-answer session. If you'd like to ask a question today, please press star one from your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants, participants who are using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Thank you. Thank you. Our first question today comes from the line of Ari Klein with BMO Capital Markets. Please proceed with your questions. Thanks, good morning. Can you provide a little more color on the weekend occupancy dynamics and what you think might be driving that? And is there an element of consumer softness that you're seeing, you know, where lower-end consumer, you know, seems to be feeling a little more pressure these days? Hey, Ari, this is Dennis. Yeah, I mean, listen, I think, you know, for the first time in a while, I think first quarter, you know, weekend occupancy was about the same as weekday, but it was down, as you noted, 200 basis points, really driven by Savannah and Destin. And I think... Listen, I think consistent with what you've heard from other, other hotel owners, you know, if you had exposure in certain parts of, you know, what I would call Florida or other high leisure markets that really spiked, in 2021 and 2022 from the pandemic, those have seen a little bit of a pullback. And, you know, I think as we've talked about really now for over a year, is that, you know, we believed and expected that the leisure markets would soften. You know, as you started to see, finally, you know, people getting back into the office and working and, you know, eventually transitioning that leisure-oriented travel to be more business travel. You know, I think that's essentially what we saw. If you look at, you know, if you look at our seven hotels, I think we talked about, you know, Destin and Savannah were the worst. But really, outside of that, we had a good mix. Anaheim was up 15%, Pittsburgh was up 11%, Portland up 11%, Portsmouth, New Hampshire, down 4%, and Fort Lauderdale was up 1%. You know, I think, you know, it's really just specific to where those leisure hotels are. But, you know, again, kind of not surprising. Got it. And then just, you talked a little bit about what you're doing on the other revenues, things like parking, to enhance kind of growth and profit. What's the incremental opportunity that you still see there? Yeah, I mean, listen, I think, you know, we, we put out some pretty broad increases in March of this year on the parking front. You know, at certain hotels, you know, we're tweaking our initiatives to include what I would kind of refer to as surge pricing. So, for example, you have a Taylor Swift concert, you know, over multiple days. People are there for five or six days. You typically charge, you know, $10 a night for parking. Well, you know, most, most parking lots, most parking structures around there are changing their pricing when you have big-time citywide events or something like that. And, you know, from a hotel perspective, we should do more of that also. So it's being a little more nimble. It's being a little more active in looking at demand within the market from really a lodging perspective and saying, "Hey, can we, you know, can we continue to move parking revenue higher?" The other side is on the retail front, which is where we spent some time over the past, you know, six to 12 months, really trying to focus on our product offerings within our market, making sure we've got the stuff, primarily, if you're, if you're really thinking about it, you know, quick grab stuff and, you know, especially, you know, beer, wine, and some jurisdictions, liquor, to be able to, you know, not only offer more of it, but look at the pricing of it as well. So we- And then maybe just one more. We still have some runway there, so. Understood. And then just on the tech interns and the flexibility that companies are providing out there, do you think that that's the new normal? And do you have a sense of the size of the intern program this year relative to what they were previously? Well, there was essentially no interns last year, so it's gonna be well up from last year. I think you're probably, you know, just, you know, as we kind of sit here today, intern levels are less than what they were in 2019, just in terms of the overall programs. Having said that, you know, the stipend program is something I think, you know. Listen, there's many different types of accommodations in those markets, whether it's apartments, short-term rentals, Airbnbs, and lodging, so, you know, and corporate housing. So, you know, by providing that flexibility, it's giving a little bit more control to the intern. Those, by the way, just to clarify, those have always been there. So, you know, as I talked about in our prepared remarks, and as we mentioned it back in February, you know, any compression from these intern programs, whether it's at, you know, our hotel or in the other offerings, ultimately, is something that was not there last year and should benefit the entire market, you know, as we move forward into the summer and into the programs. But, you know, all the companies we do business with seem to be having internships, and they're—you know, most of them are doing the stipends. There are a few that are not, and we're having regular discussions with those. Of course, this is Jeff. The change means, again, a lack of visibility on our part relative to the quantity overall. So, you know, we're not being coy here. We know the business will be there. We know the markets will be up. They are. They already are up substantially, as you've heard. But if you're not able to negotiate directly with those companies like we have in the past, then we just have to, you know, do all we can to attract those folks from, you know, compared to the different sources they've got. Thank you. Appreciate all the color. Our next question is from the line of Bryan Maher with B. Riley Securities. Please proceed with your questions. Thank you, and good morning. Just a couple from me just today. I don't know, maybe for Jeremy or Dennis. You know, on the cost pressures, can you tell us kind of where you're seeing the, the most and the least relief in those categories? Yeah, I mean, listen, I think, you know, surprisingly, I think as we've talked about in our prepared remarks, you know, staffing is really not much of an issue across most of our markets. You know, I think we've obviously heard a lot of things going on in California with respect to, you know, fast food minimum wages. That really hasn't impacted us at all out in those markets. There really aren't a whole lot of what I would call large-scale cost increases, you know, that we sit here and are worried about at the moment. You know, if you look at our P&L corporate real estate taxes, just from a pure comparable basis, you know, and thankfully, we benefited some from some refunds in the first quarter. In general, you know, if you look at, you know, our largest increases in expenses, it's really probably, you know, real estate taxes and property insurance. Health insurance is also- Yeah. Health insurance. Yeah, I mean, you know, and that was the last thing I was gonna talk about, which is health insurance just continues to be, you know, a pain in everyone's butt, with, you know, it seems like every year, there's double-digit increases. Do you- On the positive side, for utilities, we're starting to see costs actually come down year-over-year there, so should be a little help. Do you expect any more tax refunds that move the needle at all, or is that pretty much behind you? We don't expect anything, but we're constantly appealing assessments, so you never know. I mean, we've reflected everything here that has happened or that we know about, and but we'll keep pushing. Okay. And then just last for me, it seems like, you know, we should be expecting, you know, more capital recycling with dispositions and likely acquisitions over the next, let's say, 6-18 months than we've seen in a little while. Can you tell me, and maybe for Jeff, what are the criteria that you're looking for, you know, kind of the most? You know, maybe kind of 1, 2, and 3 on the list of markets that you want to enter. Is it, you know, migration? Is it, you know, business growth? You know, what is it in a market that you're looking for? Thanks. I think, yes, just to kind of buttress what you're saying, we were very encouraged by the ability to sell that Denver Tech Center hotel at the number we did. We were encouraged by, you know, the relatively high number of bidders that were on the deal. So that really caused us to take a real hard look at our ten-year CapEx plan, the cycle renos and other renovations, you know, that would be coming up, age of hotels, and of course,... The world's different since COVID. There are markets that were very strong that just are either slow to recover or, you know, we don't think really have a lot more upside left in them. Those are hotels that we're gonna sell, and we wanna be in markets where the population growth is strong. Anytime we bought a hotel or developed a hotel in a market where population growth was strong, business growth was strong, because that's still the core of what we do around here. As you know, I mean, 80% of these hotels, you know, are business transient and related or corporate hotels. That shows you the strength that we're having this year so far, and that'll be our focus for hotels that we try to acquire. They should be ten years old or less, for the most part, and we do see some deals that are brand-new deals, where some developers need to take care of some maturities or recycle their own capital for some other hotels they may have under construction around the country. There's still a few folks out there, you know, that have some older pipelines, older meaning deals that already are underway, 'cause we all know there's not a ton of brand-new deals getting started. And we see that as a decent source of acquisitions also. Okay, thank you. Thank you. As a reminder, to ask a question today, you may press star one from your telephone keypad. The next question is from the line of Tyler Batory with Oppenheimer. Please proceed with your question. Hi, good morning. This is Jonathan on for Tyler. Thanks for taking our question. First one from me is on RevPAR in April, obviously very strong. Can you provide some additional color on that strength, how that number came in, maybe versus your expectations, and kind of the puts and takes that impacted the month with Easter shifting out and, and Passover, standing alone? Thanks. Yeah, this is Dennis. I think, listen, it starts with our tech hotels, you know, RevPAR up essentially 12% in April for those five hotels. You know, that obviously is a strong performer. But I think in general, you know, we saw kind of some encouraging trends across our portfolio outside of what I would call, again, the leisure markets, more BT-driven. Washington, D.C., has performed very well for us. We've got three hotels in that area. As we talked about, the Embassy Suites there did really well, despite being under renovation for most of the quarter. And, you know, our New York suburban hotels also showed some pretty good growth. So it's really, you know, starts with the tech hotels and just continues with just overall demand strength from the BT, business traveler. And, you know, that's, I think, what we're hopeful that we continue to see. As Jeff talked about, we do have, you know, the booking window is very low or very short at the moment, and, you know, it's hard to, you know, go out there with a pretty aggressive number. So we're encouraged by what we saw in April, especially on the weekday travel front. And, you know, I think, if we can see the same thing here in May as rates really start to ramp up, then hopefully we deliver a pretty good quarter. Okay, very helpful. Maybe switching gears on the Los Angeles market, any thoughts overall on that market? What's driving the underperformance relative to your expectations that you mentioned, and kind of your outlook or, or what needs to happen in that market to get back to 2019? Yeah, I mean, it was, you know, up until really kind of the last six months, it was one of our strongest markets. I think, you know, it had a soft fourth quarter and soft first quarter. Some of that was weather driven, but, you know, as we've talked about, I think it's more of an L.A. focus. There just isn't a ton of business travel into the market at the moment. You know, we are starting to see some signs of life there, especially at our, you know, Woodland Hills and Marina del Rey hotels. I think as we talked about, our Anaheim Residence Inn had a great first quarter, so it's really that BT travel into downtown and up near Warner Center. Okay, very helpful. Thank you for all the color. That's all for me. Thank you. At this time, we have no additional questions. I would like to turn the floor back to Jeff Fisher for any closing remarks. Well, thanks, everybody, for being on the call again. I think I'll just pick up from where Dennis left off, saying, that as we look at the guidance given for the second quarter and the rest of the year, we, we certainly are, I think, on the conservative side. We are taking a wait and see attitude for the most part, as to the kind of RevPAR results that we might see through the quarter and the rest of the year. We are very encouraged by April numbers. We're very encouraged by strength we've seen already into May, and we will continue to push the envelope, as I said in my prepared remarks, on all fronts, to continue to propel these earnings in FFO for the company. Thanks for listening. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.