RLJ Lodging Trust (RLJ) Q3 2024 earnings summary

Executive summary

• Third quarter results exceeded expectations, driven by strong RevPAR growth, effective expense management, and robust business transient segment performance, despite late-quarter storms.

• Operates 95-96 premium-branded, urban-centric hotels with 21,156 rooms as of September 30, 2024, focusing on high-margin, focused-service and compact full-service properties.

• Urban portfolio outperformed the industry, with urban hotels achieving 2.5% RevPAR growth and gaining 100 basis points of market share for the sixth consecutive quarter.

• Significant 2024 activities included two hotel conversions, acquisitions, a non-core hotel sale, a new $500M term loan, and share repurchases totaling over 2 million shares.

• Quarterly dividend increased by 50% to $0.15 per share.

Financial highlights

• Q3 2024 RevPAR grew 2.0% year-over-year to $145.23, with occupancy at 75.1% and ADR at $193.39.

• Q3 2024 total revenue was $345.7M, up 3.4% year-over-year; net income attributable to common shareholders was $14.3M, up from $10.2M in Q3 2023.

• Q3 2024 Adjusted EBITDA was $91.9M, with margins between 29.2% and 32.0%.

• Adjusted FFO per diluted share was $0.40; Q3 FFO was $54.7M, and Adjusted FFO was $61.2M.

• Non-room revenue increased 7.3%, driving total revenue growth of 3%.

Outlook and guidance

• Reaffirmed 2024 guidance: comparable RevPAR growth of 1%-2.5%, hotel EBITDA of $382.5M-$402.5M, corporate-adjusted EBITDA of $346.5M-$366.5M, and adjusted FFO per share of $1.45-$1.58.

• 2024 capital expenditures expected at $100M-$220M; net interest expense forecasted at $92M-$94M.

• Fourth quarter RevPAR expected to be constrained by hurricane and election impacts, with October up 1.5% year-over-year and November the weakest month.

• 2025 outlook anticipates continued urban outperformance, ramp from conversions, and benefits from major citywide events.