Chatham Lodging RevPAR Growth Reaccelerates After a Slow Start
Comparable-hotel RevPAR rose more than 8 percent to $161 in the third quarter, and AFFO per diluted share accelerated 31 percent to $0.46.
Chatham Lodging Trust (CLDT), a lodging REIT focused on upscale extended-stay and premium select-service hotels, reported third-quarter RevPAR growth that reaccelerated after a slower second quarter, as Silicon Valley and a newly acquired Midwest portfolio carried the 39-hotel comparable set to an all-time third-quarter mark.
For the 39 comparable hotels, RevPAR rose more than 8 percent to $161 from $149 a year earlier, after a 3 percent increase to $158 in the second quarter. Occupancy rose 390 basis points to 83 percent and average daily rate rose 310 basis points to $194. Chief operating officer Dennis Craven said the 83 percent occupancy was the highest quarterly figure since the third quarter of 2019 and that 13 hotels, or one-third of the portfolio, posted double-digit RevPAR growth. He said the quarter’s RevPAR growth was the highest quarterly increase since the pandemic-related recovery.
Silicon Valley, which accounts for 18 percent of last-twelve-months Adjusted Hotel EBITDA contribution, was the standout. RevPAR there accelerated 23 percent to $174 from $142, after 7 percent growth in the second quarter. The two Sunnyvale hotels posted 31 percent RevPAR growth. Craven said Silicon Valley “continues to be our hottest market” and that performance was even better outside World Cup dates, when business travelers stayed away.
The six-hotel Hilton-branded Midwest portfolio bought in March for $92 million produced RevPAR growth of 10 percent to $132, following 9 percent growth in the second quarter and 5 percent in the first. Occupancy on that portfolio was up 8 percent to 85 percent and ADR up 2 percent to $157. GOP and Adjusted Hotel EBITDA margins on the acquired hotels were 45 percent and 41 percent. President and chief executive Jeffrey H. Fisher said third-quarter RevPAR was up 18 percent in Effingham, 11 percent in Joplin and 2 percent in Paducah, and that the company should benefit from business travel and a full calendar year of events at expanded athletic facilities in Joplin and Paducah as it shifts toward 2027.
Other large markets were mixed. Washington, D.C. RevPAR rose 15 percent to $165, Dallas rose 20 percent to $100, Los Angeles rose 5 percent to $192, Seattle rose 4 percent to $190 and San Diego rose 2 percent to $198. Greater New York fell 1 percent to $195 and Coastal Northeast fell 3 percent to $259. Craven attributed the New York decline to a tough Holtsville comp that had benefited from the Ryder Cup in 2025, and the Coastal Northeast decline to lower inbound travel from Canada and a new Homewood Suites weighing on Portsmouth.
Margins expanded. GOP margin advanced 110 basis points to 45 percent and Adjusted Hotel EBITDA margin rose 190 basis points to 39 percent, after 50 basis points of GOP expansion in the second quarter. Gross operating profit was $41 million and Adjusted Hotel EBITDA was $35 million. Craven said that on a per-occupied-room basis across 33 comparable hotels, the company limited total hotel expense growth to 2.5 percent and department expenses to 2.9 percent. The company attributed the margin gains to expense management, especially labor and productivity.
Adjusted EBITDA increased $6 million, or 21 percent, to $32 million. AFFO per diluted share accelerated 31 percent to $0.46 from $0.35, after a 22 percent increase to $0.48 in the second quarter; AFFO was $23 million. Net income applicable to common shareholders more than doubled to $5 million, or $0.11 a share, from $2 million, or $0.03 a share, a year earlier. Beginning in 2026 the company adds back share-based compensation in its adjusted FFO calculation and recast prior periods.
October RevPAR for the 39 hotels climbed 8 percent to $170, an all-time high for October. The company repurchased no shares in the third quarter. Since inception it has bought 2.5 million shares, about 5 percent of outstanding shares, at a weighted-average $7.29 for about $18 million under a $25 million plan.
Full-year 2026 guidance is RevPAR of $145 to $146, or 4.0 percent to 4.5 percent growth, total hotel revenue of $320 million to $321 million, Adjusted EBITDA of $104.2 million to $105.3 million, Adjusted FFO of $68.7 million to $69.9 million, or $1.38 to $1.40 a share, and Adjusted Hotel EBITDA margins of 36.3 percent to 36.5 percent. The company said it does not undertake to update guidance.
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