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DATE

Thursday, May 7, 2026 at 11 a.m. ET

CALL PARTICIPANTS

  • Chairman, President, and Chief Executive Officer — Jeffrey H. Fisher
  • Executive Vice President and Chief Operating Officer — Dennis M. Craven
  • Senior Vice President and Chief Financial Officer — Jeremy Bruce Wegner

TAKEAWAYS

  • Guidance Increase -- 2026 full-year guidance increased by approximately 15% since February, with updated outlook reflecting improved operational trends and portfolio performance.
  • Dividend Growth -- Common dividend raised by 11% in the first quarter, following a 28% increase in 2025, resulting in a dividend to FFO payout ratio of 32% based on updated guidance.
  • Share Repurchase Activity -- 2.2 million shares repurchased (4% of common equity) at an average price of $7.04 in Q1; an additional 200,000 shares repurchased in April at an average price of $8.34, funded by free cash flow under an ongoing $25 million plan expected to conclude in 2026.
  • New Acquisition -- Acquired six Hilton-branded hotels with 589 rooms for $92 million in March, financed via revolving credit facility at a 5.1% rate; properties have an average age of 10 years and require minimal near-term CapEx.
  • Portfolio Diversification -- Acquired hotels expand geographic footprint into manufacturing and distribution-focused U.S. regions, with 66% of rooms being extended stay; portfolio produced RevPAR growth of 6% in Q1 and 7% in April after acquisition.
  • Comparable Hotel Performance -- Hotel EBITDA grew 5% year over year at 33 comparable hotels, with hotel EBITDA margins rising 135 basis points and GOP margin reaching 40.2%.
  • Silicon Valley Results -- Excluding Mountain View (under renovation), three hotels reported 23% RevPAR growth in Q1 and 12% in April, with occupancy at 72% and ADR up 10% to $210, setting a post-pandemic high.
  • Segment Insights -- Over two-thirds of hotels achieved RevPAR growth; 25% attained double-digit RevPAR increases; top five RevPAR properties included Residence Inn Fort Lauderdale ($262) and Home2 Phoenix Downtown ($191).
  • Labor and Expense Management -- Labor and benefits per occupied room decreased by over 1% in Q1; property insurance and taxes savings offset a 12% increase in utility costs, supporting margin improvement.
  • Hotel Investment Pipeline -- CapEx for the quarter totaled $6 million; full-year CapEx budget is $27 million with three major renovations planned for Q4; minimal CapEx required for newly acquired properties.
  • Balance Sheet and Leverage -- Post-acquisition leverage ratio is 32.5% per credit agreement, maintaining financial flexibility for continued share buybacks and development initiatives.
  • 2026 Financial Outlook -- 2026 guidance projects RevPAR growth of 0%-2%, adjusted EBITDA of $95.3-$99.6 million, and adjusted FFO per share of $1.21-$1.29; Q2 RevPAR anticipated to increase by approximately 1%-2%.

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RISKS

  • Executive Vice President and Chief Operating Officer Dennis M. Craven said, "the 2026 convention calendar is a bit softer than 2025, and we are forecasting a RevPAR decline of about 2% for the rest of the year" in San Diego, indicating lower anticipated demand for that segment.
  • "our coastal Northeast hotels saw RevPAR decline 8% in the quarter," with Portland and Exeter hotels lapping prior-year renovation-driven comps.
  • Texas convention market softness cited, including "RevPAR at our Courtyard Dallas was down 26% in the quarter," attributed to convention center renovation and expansion, with Austin also described as "weak" due to prolonged market conditions.

SUMMARY

The call highlighted that Chatham Lodging Trust (CLDT +12.54%) raised its 2026 guidance and signaled a strong capital return commitment through its increased dividend and accelerated share repurchase program. Senior management confirmed completion of a $92 million acquisition of six Hilton-branded hotels, which are immediately accretive and diversify the portfolio geographically and by industry focus. Current year guidance assumes continued expense discipline, sustained growth in high-performing markets such as Silicon Valley, and a stable balance sheet that supports both investment and shareholder returns.

  • The company emphasized the minimal near-term CapEx needs of its newly acquired portfolio, with only one renovation scheduled in the next two years.
  • Leadership reiterated plans to seek further capital recycling through selective asset sales, with proceeds intended for share repurchases or new investments.
  • Management expects medium-term benefits from major events like the World Cup and regional infrastructure developments, but guidance incorporates conservative assumptions regarding these contributions.
  • Ongoing renovation and development activity—exemplified by planned construction at Portland, Maine—remains aligned with targeted, high-return capital allocation as measured by projected unlevered returns.

INDUSTRY GLOSSARY

  • RevPAR: Revenue per available room, a key performance metric used by hotels to measure average guest room revenue generated per available room over a specific period.
  • ADR: Average daily rate, representing the average rental income per paid occupied room in a given time period.
  • FFO: Funds from operations, a REIT-specific measure of operating performance that excludes depreciation and amortization unique to real estate.
  • GOP Margin: Gross operating profit margin, calculated as hotel operating profit as a percentage of total revenues.
  • Cap Rate: Capitalization rate, the ratio of net operating income to property asset value; a common valuation metric for income-generating real estate.

Full Conference Call Transcript

Jeffrey H. Fisher: Alright, Chris. Thank you very much, and I certainly appreciate everyone joining us here today. It was really a great quarter, obviously, for us on every front, delivering for our shareholders. Given our strong operating results, great acquisition and continued share repurchases, as well as improved outlook for the remainder of the year, we have increased our guidance by approximately 15% since February. On the corporate side, we increased our common dividend by 11% in the first quarter, following a 28% increase in 2025. With a common dividend to FFO payout ratio of only 32%, based on our updated guidance, our dividend is well covered with ample room to continue growing in the future.

We will reevaluate the quarterly dividend later this year. Also, we continue to aggressively repurchase shares using free cash flow. Through the end of the first quarter, the company has repurchased 2.2 million shares, or approximately 4% of our common equity, at an average price of $7.04, which equates to a 10% cap rate based on the updated 2026 guidance. At current share price levels, we are trading over a turn lower than our select-service peers’ current EBITDA multiple, which is not reflective of our financial strength or our upward trajectory of our portfolio, especially given the continued strength and increasing strength of our Silicon Valley recovery. We will continue to repurchase shares given the market disconnect.

Externally, we have been executing a massively successful recycling campaign over the last couple of years highlighted by the recently acquired portfolio of six high-quality Hilton-branded hotels comprising 589 rooms for $92 million that are immediately accretive to Chatham Lodging Trust’s operating margins, FFO, and FFO per share. The portfolio diversifies our geographic footprint into areas of the country that are benefiting from expanded investments in manufacturing and distribution. The hotels are generally the highest quality properties in their respective markets with an average age of only 10. Sixty-six percent of the portfolio’s rooms are extended stay. The hotels benefit from very favorable labor dynamics and will enhance Chatham Lodging Trust’s already industry-leading hotel EBITDA margins.

Performance since closing has been great, with the portfolio producing RevPAR growth of 6% in the first quarter and an even stronger 7% in April. Obviously, we are very excited about this acquisition. Operationally, it was a great quarter for us with RevPAR, hotel EBITDA margins, and hotel EBITDA easily beating our expectations for the quarter. On a comparable basis, our hotel EBITDA grew 5%, and our hotel EBITDA margins gained 135 basis points.

Facing difficult comps due to the significant amount of wildfire demand last year in our LA hotels, our RevPAR went from a decline of 5% in January to growth of 1% in February and up 5% in March, finishing the quarter up 1%, which was well above our expectations for the quarter. Silicon Valley led the way with RevPAR growth of 23% in the quarter when you exclude the Mountain View hotel, which was under significant renovation. We experienced broad demand growth across our portfolio, with over two-thirds of our hotels generating RevPAR growth and approximately 25% of our hotels earning double-digit RevPAR gains.

I do want to spend a few minutes talking about our largest market, Silicon Valley, since these hotels had an incredible start to the year. Occupancy at our four Silicon Valley hotels was 72%, flat to last year despite our Mountain View hotel being under renovation for the entirety of the quarter, and ADR was up 10% to a post-pandemic quarterly high of $210. Not a first-quarter high, a high mark for all post-pandemic quarters, and our RevPAR of $152 would be the second best quarter over the last six years. These are great results and very encouraging, again, especially considering the renovation at Mountain View during the quarter.

For the other three hotels, RevPAR was up double digits in each month of the quarter, finishing the quarter with a strong growth of 23%, as I said, and advancing another 12% in April. As Dennis quoted in the release, demand was up 9% in the first quarter and in April across the entire San Jose–Santa Cruz market. Our hotels did way better than that growth, as our extended-stay Residence Inn hotels, as we have said before, are best suited for the corporate traveler coming to the Valley. RevPAR was up 15% at our San Mateo hotel, and our two Sunnyvale hotels shined with RevPAR up 26% in the quarter.

Of course, massive capital investment announcements continue into technology from all types of companies and, seemingly unending these days, major technology companies are engaged in a historic multi-hundred-billion-dollar investment arms race, as it has been called, in 2026, with big tech projected to spend over $650 billion on AI infrastructure alone. Capital is flowing aggressively into data centers, specialized semiconductors, and energy, with aggregate global AI investment projected to approach trillions. Of course, Silicon Valley is the heart of the tech world. We do not see that changing anytime soon, and having just been out there last month, I can tell you the energy and overall activity is the most positive I have felt since before the pandemic.

In Sunnyvale, construction of the multibillion-dollar Applied Materials chip facility—our number one account, by the way—that is near both of our hotels in Sunnyvale is in full swing. Actually, they got a permit to build 24 hours a day. We tried to fly a drone over it to kind of share on one of our investor reports, but we kind of got knocked down on that idea by the people in charge there.

Anyway, our two Sunnyvale hotels are seeing surging room-night production for our largest clients, many of whom are involved in these investments, as I said, such as Applied Materials, Palo Alto Networks, NVIDIA, of course, Google—particularly in Mountain View—Apple, Pure Storage, Plug and Play, and the list goes on and on. We certainly are encouraged about what finally seems to be happening for sure in the Valley. In the short term, of course, adverse repercussions stemming from the turmoil in the Middle East, especially with respect to gas prices and their impact on travel, so far have yet to make any meaningful impact.

We have easier comps over the last three quarters of the year in our three DC hotels as a result of all the DoJ and shutdown events that occurred last year. And, of course, we do have US 250 celebrations, so as to that market, I think we have got some visible upside there. Additionally, we do, as others have mentioned, have the highest—some of the highest—exposure to the World Cup among lodging REITs, and in Dallas, our Courtyard Downtown is right next to the convention center, which will host up to 5 thousand media professionals as it is serving as the international broadcast center for the World Cup.

In addition to Dallas, our hotels are quite close to stadiums in San Francisco and Los Angeles, and our Bellevue Residence Inn is positioned for easy commuter rail access to the stadium in Seattle, and our Residence Inn in Fort Lauderdale should also benefit. And, of course, importantly, business travel demand, especially in our tech markets, is surging. Recovery in our tech hotels, which accounts for over 20% of our EBITDA, represents a unique opportunity for us to outperform our peers. Longer term, of course, just looking forward, the supply-demand equation that we have talked about before should still continue to benefit existing hotel owners.

Construction costs, of course, remain quite high, and development is only justified in a few markets. Demand growth is quite encouraging so far, as we have said, in 2026. Business demand should continue to rise even if a portion of the trillions of dollars of announced investments in technology and reshoring of manufacturing come to fruition in the United States, and, of course, that is where I think our Midwest portfolio that we acquired should also benefit, I think, on an outsized basis, being in the hub of the manufacturing belt in the US.

Leisure travel, approximately 18% of our hotel EBITDA, will continue to benefit as well from changing consumer demand behavior as travelers want more experiences and nights away from home. Finally, on my end, we will continue to opportunistically sell some older, non-performing assets with the goal, of course, of capital recycling, reinvesting those proceeds into share repurchases or hotel investments. Also, we expect to commence our Portland, Maine hotel development during the quarter. So although we have been talking about it for quite some time, they are actually beginning to erect a fence around that portion of the property, so it is happening, with opening before the fall season of 2028.

Dennis may say otherwise, but we will kind of hedge that bet a little bit. We will provide a detailed breakdown of total spend and timing in connection with our second quarter earnings call in August, but I will tell you the unlevered returns are projected to be quite strong, as we have mentioned. With that, I would like to turn it over to Dennis.

Dennis M. Craven: Thanks, Jeff. Good morning, everyone. To supplement Jeff’s comment regarding using free cash flow to buy back shares, we implemented our $25 million repurchase plan in 2025, and our free cash flow was $15 million in 2025 and is projected to be approximately $20 million in 2026. So, therefore, we intend to finish the entire $25 million program this year and will be reevaluating a new plan in the coming months. After the end of the quarter in April, we did buy approximately 200 thousand shares at approximately $8.34 a share. Some additional quarterly information.

Our top five RevPAR hotels in the quarter were our Residence Inn Fort Lauderdale with RevPAR of $262; our Home2 Phoenix Downtown with RevPAR of $191; followed by our Residence Inn Gaslamp; our HGI Marina Del Rey; and our Residence Inn by Marriott White Plains with RevPAR of $164. Our two Sunnyvale and San Mateo Residence Inns were three of our top 10 RevPAR hotels for the quarter. Our seven predominantly leisure hotels generated RevPAR growth of a little over 2% in the quarter.

Six of our seven leisure-driven hotels produced RevPAR growth, with our Hyatt Place Pittsburgh leading the way with RevPAR growth of 23%, benefiting from a solid convention calendar—the convention center is right across the river from our hotel—and demand related to sporting events, especially Pittsburgh Penguins hockey. And, of course, in April, the NFL Draft activity contributed meaningfully, and we did really well there with RevPAR up over about 250% during the week. Our three predominantly government-oriented hotels, all in the greater DC area, are comping over the inauguration and last year’s disruptions. As a group, those hotels represent approximately 9% of our EBITDA. Our Springfield and Tysons Corner hotels are recovering.

San Diego RevPAR grew 5% in the quarter, outperforming our expectation, which was a decline of 5%. We are obviously quite pleased with the quarter. As a reminder, though, the 2026 convention calendar is a bit softer than 2025, and we are forecasting a RevPAR decline of about 2% for the rest of the year. Hopefully, we have some upside there. In other large markets, our coastal Northeast hotels saw RevPAR decline 8% in the quarter. Our Portland and Exeter hotels benefited last year from renovations at hotels in the comp set. In Texas, our Dallas and Austin hotels have felt the impact of convention demand falloff with convention centers under renovation and ongoing expansions.

RevPAR at our Courtyard Dallas was down 26% in the quarter, though the good news is that our comps get better in the second quarter as we start to lap over prior weaknesses from the closure. In Austin, our Residence Inn was under renovation for the bulk of the quarter, and that renovation is finished. Having said that, the entire Austin market has really been weak with overall RevPAR down 6% over the last twelve months. Like Dallas, comps start to get easier there towards the second half of the year.

As an update—and this is really a great development—it was officially announced that the planned $3 billion MD Anderson Hospital and Research Center that was previously expected to be built downtown is now expected to be built at the JJ Pickle Research Campus, and groundbreaking is expected to start this year. That campus is approximately one mile from both of our hotels at the Domain, and because our two hotels are both extended stay, we should benefit greatly from this new facility that will be under construction shortly. Of course, we only owned the new six-pack of hotels for most of March, but as Jeff said, we are quite pleased with the performance of that group.

RevPAR growth again for the quarter was up 6%, and then April was up 7%, slightly above our underwriting guidance. First-quarter occupancy is 74%, which was 200 basis points higher than our portfolio average for the quarter. And given that this is the first time we have spoken publicly since closing the acquisition, I do want to spend some time just sharing some color on the portfolio that we acquired. The markets further diversify our geographic footprint into areas of the country that are benefiting from expanded investments in manufacturing and distribution. Joplin, Missouri, is adjacent to the intersection of both Interstates 44 and 49 in Southwest Missouri and benefits from its location between Kansas City, St.

Louis, Oklahoma City, and the ever-growing Northwest Arkansas area, which is home to, of course, Walmart, JB Hunt, and Tyson Foods. Key industries in the Joplin area include manufacturing, with major players there including General Mills, Frito-Lay, Coca-Cola, Cargill, and the headquarters of Leggett & Platt, and, obviously, distribution given its proximity is a major driver there. Additionally, the hotels will benefit from an almost $400 million development called Prospect Village, which will be home to a sports complex. It will include a 135 thousand square foot indoor athletic center as well as outdoor turf fields.

The sports complex is expected to host 28 indoor tournaments and 22 outdoor tournaments over weekends each year that will generate $12 million of annual visitor spending and 27 thousand annual hotel room nights, and these will be mostly weekend nights, thus enhancing our full-week performance at the hotels. Paducah sits on Interstate 24 and is proximate to the many high-traffic commerce routes between St. Louis, Louisville, Nashville, and Memphis.

Key industries include manufacturing, with large-scale facilities in the area operated by Darling Ingredients, Frito-Lay, HB Fuller, among many others, as well as the marine industry in Paducah, as it is a major hub for the inland marine industry due to its location at the confluence of the Ohio and Tennessee Rivers with proximity to the Mississippi and Cumberland Rivers. Like Joplin, Paducah is set to open, in the next month, an almost $100 million multi-sport outdoor sports complex, and it is expected to host 35 to 40 tournaments a year. In 2026, it is projected to at least host two full-weekend tournaments per month for the next six months.

Additionally, on the longer-term horizon for Paducah, in March it was announced that Global Laser Enrichment is planning to build a new nuclear enrichment facility on a 665-acre site in Paducah. Plans are currently under review by the Nuclear Regulatory Commission, and once approved, construction will take approximately three years to open. The project is expected to generate approximately 1,000 jobs over the course of construction and hundreds of jobs upon completion, and just given the nature of the facility, it is going to be a constant source of demand from, obviously, ongoing visitations from authorities, interested parties, and everything of the like. So really good long-term project there.

Effingham sits at the crossroads of Interstates 57 and 70, midway between Indianapolis and St. Louis, and brings into its area about 200 thousand workers from eight neighboring counties each week. Key industries include food and agriculture, with major players such as Archer Daniels Midland, Krusteaz, Pepsi, and Siemer Milling. Manufacturing is also a major player, with Flex-N-Gate, Hitachi Metals, Effingham Machine and Assembly, and Peerless of America, and then, of course, again, similar to the other two markets, distribution given its relation to many different modes of transportation is a big player.

Shifting my comments back to our operating results, we did grow hotel EBITDA 5% at our 33 comparable hotels, as we were able to increase our GOP hotel margins on the back of a decline in labor and benefits per occupied room of over 1%. Additionally, we drove our other operating profit percent higher in the first quarter. Looking at guidance for the remainder of the year, our hotel EBITDA margins are up about 100 basis points from our previous guidance. And continuing the trend since last year, we have stayed laser-focused on our staffing levels and maximizing productivity and efficiencies.

As a reminder, in 2025, our labor and benefits costs declined year over year slightly, and we are the only lodging REIT to accomplish that. And, like I said, in the first quarter, we were able to reduce our labor and benefits by over 1%, or $0.50 per occupied room. We also benefited from lower property insurance renewal rates and property taxes due to some refunds, and those items were able to absorb an approximate 12% increase in utility costs at our comparable hotels. We were particularly impacted by the massive snowstorm across the middle of the country and Northeast in the early part of the first quarter.

For the quarter, our top five producers of GOP were led by our Residence Inn San Diego; our two Sunnyvale Residence Inns; then our Home2 Phoenix; and, lastly, our Residence Inn Fort Lauderdale. Outside of our top five but in our top 10 was also our Residence Inn San Mateo. So, again, all three of the Silicon Valley hotels that were not under renovation were in our top 10. Looking at these comparable Silicon Valley hotels, hotel EBITDA grew a remarkable 35% year over year on what was a 23% RevPAR increase for a 1.5 times flow-through—again going to show you the upside financial leverage we can get when these hotels start to grow.

That 35% growth is pro forma for a property tax refund that we received on one of those three hotels during the quarter. If you include that, the actual growth was about 50% in hotel EBITDA. On the CapEx front, we spent approximately $6 million in the quarter. We completed the full renovation of our Residence Inn Austin and the rooms portion of the Mountain View renovation.

We are completing major interior upgrades to the Mountain View gatehouse that will be complete here in the next month, and later this year, we will be completing a significant enhancement to our gatehouse outdoor amenities that will be fantastic for our guests to enjoy the great weather as well as to collaborate with other guests in a very nice setting. Our CapEx budget for 2026 is approximately $27 million. We have three hotels scheduled for renovation later this year: our Gaslamp Residence Inn, our Hyatt Place Pittsburgh, and our Farmington Homewood Suites, and those are all expected to start in the fourth quarter.

Lastly, I will add that the six recently acquired hotels have very little CapEx required this year, and, in fact, only one hotel is scheduled for renovation over the next two years—the Hampton Inn & Suites Paducah. With that, I will turn it over to Jeremy.

Jeremy Bruce Wegner: Thanks, Dennis. Good morning, everyone. Our Q1 2026 hotel EBITDA was $21.4 million. Adjusted EBITDA was $818.4 million and adjusted FFO was $0.20 per share. We were able to generate a GOP margin of 40.2% and hotel EBITDA margin of 31.8% in Q1. GOP margins for the quarter were up 60 basis points from Q1 2025 due to outstanding expense control. As Dennis mentioned, Q1 labor and benefits costs actually decreased 1% on a per occupied room basis. Q1 hotel EBITDA margins increased by 140 basis points due to both the strong expense control and $500,000 of property tax refunds in the quarter.

In early March, Chatham Lodging Trust closed on the acquisition of a portfolio of six Hilton-branded hotels for $92 million. The acquisition was funded with borrowings on our revolving credit facility, which currently has a rate of approximately 5.1%. We are very excited about this acquisition given the hotels’ average age of only approximately 10 years, outstanding margins, strong RevPAR growth, and limited near-term capital needs. We expect this acquisition to be significantly accretive to Chatham Lodging Trust’s FFO and free cash flow. After this acquisition, Chatham Lodging Trust’s leverage ratio, as defined in our credit agreement, was only 32.5%.

Chatham Lodging Trust’s strong balance sheet puts the company in an excellent position to continue actively repurchasing shares, pursue the planned development of a hotel in Portland, Maine, and to continue to grow opportunistically through accretive acquisitions. Turning to our 2026 guidance, we expect RevPAR growth of 0% to 2%, adjusted EBITDA of $95.3 million to $99.6 million, and adjusted FFO per share of $1.21 to $1.29 for the full year. Our guidance reflects the contribution from the $92 million acquisition from March 3 forward. Reflecting the pro forma impact of this acquisition, our 2025 RevPAR would have been $127 in Q1, $153 in Q2, $151 in Q3, $129 in Q4, and $140 for the full year.

We generally expect Chatham Lodging Trust’s Q2 2026 RevPAR will increase approximately 1% to 2%. While our guidance does not reflect any share repurchases or acquisitions, our plan is to continue repurchasing shares and, over time, to continue to pursue accretive acquisitions. This concludes my portion of the call. Operator, please open the line for questions.

Operator: Thank you, sir. Ladies and gentlemen, we will now begin the question and answer session. If you would like to ask a question, please press star followed by the number one on your telephone keypad. If your question has been answered and you would like to withdraw from the queue, please press star followed by the number two. And if you are using a speakerphone, please lift your handset before pressing any keys. One moment, please, while we compile the roster. Your first question comes from Gaurav Mehta with Alliance Global Partners. Please go ahead.

Gaurav Mehta: Yeah, thank you. Good morning. I wanted to ask you on the portfolio acquisition, hoping to maybe get some more color. Was this an off-market deal or a fully marketed deal? What were the cap rates like? And it seems like the performance for the portfolio is coming in better than what you underwrote during the acquisition. What do you attribute that outperformance to?

Dennis M. Craven: Hey, Gaurav. Yes. I mean, I think the transaction itself was a broker transaction sent out to, I guess, a group of parties. I think one of the things that we liked about the deal—and I think there are not a lot of buyers out there that have the ability to kind of take down a $100 million acquisition—it is kind of too big for a bunch of buyers that we might see on an individual deal.

And we were certainly involved in the transaction and, in just kind of a lot of the deals that we have looked at over the last couple years, really excited about some of these other markets that might initially be off the radar for certain other people, but, you know, just doing a lot of work and seeing a lot of information, we liked the transaction. The performance of the portfolio is—I would not say meaningfully—above our underwriting, but both in terms of the first-quarter performance and the April performance, RevPAR growth I would say is a buck or two above where we thought it was going to be.

So it is not significantly outperforming our underwriting, but it is outperforming. So just very pleased with the six hotels and how they have gotten out of the gate so far, and really like what it does for us in terms of diversifying into some other industries and a little bit into the Midwest of the country.

Gaurav Mehta: Alright. Thanks for that color. Maybe on the acquisition market in general, are you guys seeing more activity now in the transaction market compared to maybe last quarter?

Dennis M. Craven: I think it is similar to last quarter, Gaurav. I think it is still a challenged market, especially when you look at individual-type transactions. I think, thankfully, the public companies—their multiples—are, thankfully, starting to adjust a little bit here, so it is going to allow people to have a little bit of a lower cost of capital, which might generate some additional interest. But at the moment, I think it is pretty consistent in terms of deal flow, last quarter to this quarter, but that is certainly more than what we saw a year ago.

Gaurav Mehta: Alright. Thanks for that color. And then maybe on, I guess, asset recycling, disposition side, are there any more assets that you guys may sell, or the asset that you guys sold in the last few quarters, is that about it for now?

Dennis M. Craven: Yeah, we are still looking at that, Gaurav. And I think we will probably end up trying to sell one or two the balance of the year, with the whole purpose of, again, as we noted, reinvesting those dollars into either share repurchases or new acquisitions. But, certainly, that last program was a pretty high volume for us, and I think it will just be one or two for the foreseeable future.

Gaurav Mehta: Alright. Thank you. That is all I had.

Jeffrey H. Fisher: Thank you.

Operator: Your next question comes from Ari Klein with BMO Capital Markets. Please go ahead.

Ari Klein: Thanks and good morning. Maybe just a follow-up on the acquisitions. These are somewhat different markets than the rest of your portfolio. Just curious, any supply growth to speak of in these markets that we should be aware of? And you mentioned how some of your markets will benefit from the World Cup. What are your World Cup expectations and how is that factored into the guidance? And then, just on the guide in general, it seems like you are assuming somewhat slower growth in the second half of the year. You do have some easier comps. Is that just factoring some level of conservatism on your part?

And in Silicon Valley, previously you used to get a decent amount of intern business. It kind of has faded maybe a little bit the last couple years. How are you seeing that play out over the course of this summer?

Dennis M. Craven: Supply growth—very little. There is one hotel that just recently, I believe, opened in Paducah, but outside of that, really no new supply that is coming to the three markets. On the World Cup, I think we do have some conservatism in there in general. I think the World Cup—we are being pretty conservative, I think, in regards to that as well. There is a lot of publicity and media attention around international travelers coming in and the fact that tickets are really expensive, on top of just trying to get to the country. So we are taking a pretty measured approach in terms of our forecast for most of those markets.

Obviously, we are projecting growth, but hopefully we see some upside, not only with the World Cup, but I think just in general. Like you said, we have some easier comps with a lot of the shutdown activity, but if you look at our guidance of kind of 1% to 2% for the rest of the year, hopefully we outperform. On Silicon Valley intern business, in general the intern business has come down significantly from pre-pandemic and especially, I think it was 2022, when we had a tremendous amount of business. There is some still out there.

We do have one block of interns on the books at one of our hotels—not taking it to the bank yet—but we do have some intern business coming back this summer. That would be from the late May to mid-August time frame.

Ari Klein: That is all for me. Thanks for all the color.

Dennis M. Craven: Thank you.

Operator: Thank you. Your next question comes from Tyler Batory with Oppenheimer. Go ahead, Tyler.

Tyler Batory: Thanks. Good morning, everyone. A lot of good detail here, and congrats on the really strong results. Really nice to see the execution here. A couple of cleanup questions from me. On share repurchases and capital allocation first—it has been a while since your stock price was in the double digits. We are starting to approach that. Do share repurchases still make sense up here? You mentioned the stock still being undervalued in your mind. Any help in terms of what the portfolio might be worth? What do you think might be a fair multiple for your assets?

And a follow-up on operations, and to hit on Silicon Valley a little bit more: the RevPAR growth there is tremendous, and I am trying to get a sense, in terms of your guide talking about the rest of the year, what is included in that outlook for Silicon Valley? And could you also just frame that you have one of the assets there under renovation—if that is a catalyst in terms of driving further upside to that portfolio in the years ahead?

Dennis M. Craven: Well, that is a very interesting question. To talk about the share repurchases, if you look at where we are trading literally right this second, we are around a 9 cap on our corporate NOI and around a 10 cap on our hotel NOI. So, on a historical basis, even at $9.45, it is an attractive investment for what we determine a use of proceeds from our, obviously, free cash flow and our capital recycling. So I think we will continue to buy shares within our $25 million repurchase plan, and that probably takes us through the end of the third quarter, most likely, kind of at the rate that we have been buying shares at.

As far as what we are worth, that is a loaded question, but we certainly feel our portfolio—and most, I think, our peers would say the same—our underlying value is much better from a cap rate perspective and EBITDA multiple than where we are trading. We are still all trading at multiples that are, in the history of lodging REITs, fairly low. So I think there is a lot of upside. On Silicon Valley, the Mountain View renovation—the gatehouse has been completely closed and check-in has been using, in essence, two guest rooms as our lobby, so it has been pretty disruptive there.

But if you look at the balance of the year for the four hotels, obviously we talked about the three hotels being up 12% through April. When you look at coming out of the renovation, for the four hotels we are projecting kind of mid- to upper-single-digit RevPAR growth for the balance of the year from essentially May to December. That is a little bit, I think, conservative compared to what the first four months of the year have done, but hopefully we continue to see that demand growth. There potentially could be some upside there as well.

Jeremy Bruce Wegner: Yeah. I think even outside of the question of valuation multiple or cap rate, we just see a ton of upside in the EBITDA and NOI in particular of our Silicon Valley portfolio. So even if the multiple were not to rerate at all, I think we still see a bunch of upside in the portfolio and the stock.

Tyler Batory: Okay. Appreciate the detail. That is all for me. Thank you.

Jeremy Bruce Wegner: Thank you.

Operator: Thank you. There are no further questions on the phone line. I will turn the call back to Mr. Fisher for some closing remarks.

Jeffrey H. Fisher: Well, again, I just want to thank everybody for being on the call. We are pretty pleased here with not only the top-line results, but, frankly, I am very pleased with how the operator has been able to flow those top-line results to the bottom line, and, as Dennis mentioned, actually experiencing some reduction in some labor cost and otherwise due to some really strict controls that have been enforced very well. So we look forward to continuing to put up some good results for the rest of the year.

I think conservatism, obviously, as reflected in our peers as well, is probably the best bet for the time being given that there is a war going on in the Mideast, and I do not think we mentioned that yet, but it is certainly worth keeping in mind. But we, again, think the hotels themselves and the overall trends bode very well. Thank you.

Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a great day.