Chatham Lodging Trust — Third Quarter 2026 Earnings Summary

Financial Performance

• Net income applicable to common shareholders more than doubled to $5 million from $2 million in the third quarter of 2025; diluted net income per share was $0.11 versus $0.03.
• Adjusted EBITDA increased $6 million (21%) to $32 million from $26 million in the prior year period.
• Adjusted FFO rose to $23 million from $18 million; AFFO per diluted share accelerated 31% to $0.46 from $0.35.
• RevPAR for the 39 comparable hotels surged over 8% to $161, compared to $149 in Q3 2025.
• Occupancy increased 390 basis points to 83%, and Average Daily Rate (ADR) rose 310 basis points to $194.
• GOP margins advanced 110 basis points to 45%, and Adjusted Hotel EBITDA margins rose 190 basis points to 39%.
• Total revenue for the nine months ended September 30, 2026, was $246.2 million, up from $227.3 million in the prior year.
• Net income to common shareholders for the nine months ended September 30, 2026, was $5.2 million, compared to $4.5 million in the prior year.
• Diluted net income per common share for the nine months was $0.11, up from $0.09.
• Dividends declared per common share were $0.10 for the quarter, up from $0.09.

Guidance and Future Outlook

• Full-year 2026 RevPAR guidance is $145–$146, representing 4.0% to 4.5% growth.
• Full-year 2026 Total hotel revenue is guided at $320 million–$321 million.
• Full-year 2026 Adjusted EBITDA is guided at $104.2 million–$105.3 million.
• Full-year 2026 Adjusted FFO is guided at $68.7 million–$69.9 million, or $1.38–$1.40 per diluted share.
• Full-year 2026 Adjusted Hotel EBITDA margins are guided at 36.3%–36.5%.
• The company expects its Home2 Portland, Maine development to open in Q2 2028 and be immediately accretive.
• Management anticipates industry-wide supply/demand conditions will continue to benefit owners for the foreseeable future.

Business Segments and Product Lines

• RevPAR for the four Silicon Valley hotels accelerated 23% to $174.
• RevPAR for the recently acquired six-hotel portfolio jumped 10% to $132, outperforming underwriting expectations.
• The acquired six-hotel portfolio (589 rooms) generated GOP and Adjusted Hotel EBITDA margins of 45% and 41%, respectively, in Q3 2026.
• Thirteen hotels, representing one-third of the portfolio, experienced double-digit RevPAR growth in the quarter.
• Silicon Valley RevPAR growth was driven by a 31% increase at the two Sunnyvale hotels.
• Washington, D.C. RevPAR increased 16%, benefiting from corporate and government demand.
• Dallas RevPAR rose 20%, driven by business travel demand offsetting convention center closure impacts.
• Los Angeles RevPAR increased 5%, highlighted by 10% growth at the Marina del Rey hotel.
• Greater New York RevPAR declined 1% due to a tough comparison at the Holtsville Residence Inn related to the 2025 Ryder Cup.
• Coastal Northeast RevPAR declined 3% due to lower inbound travel from Canada and competition from a new Homewood Suites.
• Capital expenditures for the quarter were approximately $3 million; year-to-date spending was $17 million against a $27 million budget.
• Renovations are scheduled for Q4 2026 at the Residence Inn San Diego Gaslamp, Homewood Suites Farmington, Conn., and Hyatt Place Pittsburgh, Pa., totaling approximately $17 million.
• Construction commenced in June on the Home2 Suites by Hilton Portland development with total expected costs of $45 million; $5 million has been incurred to date.

Market and Competitive Landscape

• Chatham's total shareholder returns are described as the best among lodging REITs in 2026.
• Silicon Valley is identified as the company's "hottest market," setting it apart from peers.
• The company notes that business travelers avoided certain dates during the World Cup, yet performance remained strong.
• The company's leverage ratio was approximately 23% based on net debt to hotel investments at cost as of September 30, 2026.

Risks and Challenges

• Greater New York performance was negatively impacted by a tough year-over-year comparison at the Holtsville Residence Inn.
• Coastal Northeast performance was weighed down by a new Homewood Suites opening earlier in the year.
• Dallas hotels faced depressed convention-related business due to the convention center closure.
• Forward-looking statements note risks including economic conditions, travel patterns, interest rates, debt covenants, and public health emergencies.

Management Commentary and Tone

• CEO Jeffrey H. Fisher described operating results as "fantastic," citing strong top-line growth, margin expansion, and strategic decisions regarding repurchases and capital recycling.
• Fisher stated the company is confident in its position to continue outperforming based on balance sheet strength and market trends.
• COO Dennis Craven noted that Q3 occupancy of 83% was the highest quarterly level since Q3 2019 and that Q3 RevPAR growth was the highest since the pandemic recovery.
• CFO Jeremy Wegner highlighted significant free cash flow generation after dividends and capital expenditures, noting a $25 million reduction in credit facility borrowings since the March acquisition.

Other Key Points

• In March, the company acquired six Hilton-branded hotels for $92 million; the portfolio produced RevPAR growth of 10% in Q3 2026.
• The company repurchased 2.5 million shares (approx. 5% of outstanding shares) since inception of its $25 million plan, at a weighted-average price of $7.29, for an aggregate cost of $18 million; no shares were repurchased in Q3 2026.
• Total debt outstanding as of September 30, 2026, was $408 million at an average interest rate of 5.9%.
• Net debt as of June 30, 2026, was $394 million.
• The company declared quarterly common and preferred dividends of $0.10 and $0.41406 per share, respectively, payable October 15, 2026.
• Beginning in 2026, the company adds back share-based compensation expense in its calculation of adjusted FFO per share, with prior periods recast.
• The company owns 39 hotels totaling 5,610 rooms/suites in 18 states and the District of Columbia.