Chatham Lodging Q3 2026: RevPAR Jumps 8% to $161, AFFO Up 31%

Chatham Lodging Trust (NYSE: CLDT) reported third quarter 2026 revenue per available room of $161 across its 39 comparable hotels, an increase of more than 8 percent from the prior-year quarter and an all-time third-quarter high, the company announced on November 5, 2026. Net income applicable to common shareholders more than doubled to $5 million, or $0.11 per diluted share, while adjusted funds from operations per diluted share rose 31 percent to $0.46. Adjusted EBITDA climbed 21 percent to $32 million.

Context — why the lodging REIT's margin expansion matters now

The company's third-quarter RevPAR of $161 followed an all-time second-quarter mark, and July and September each set the highest monthly RevPAR in Chatham's 16-year history. That sequence matters because lodging REITs typically earn their strongest margins when occupancy and rate rise together, and Chatham delivered both: occupancy increased 390 basis points to 83 percent, the company's highest quarterly occupancy since the third quarter of 2019, and average daily rate rose 310 basis points to $194.

The company credited aggressive expense management, particularly in labor and productivity, for expanding gross operating profit margins by approximately 110 basis points to 45 percent and adjusted hotel EBITDA margins by 190 basis points to 39 percent. On a per-occupied-room basis, Chatham limited total hotel expense growth to 2.5 percent and department expenses to 2.9 percent, chief operating officer Dennis Craven said.

Chatham's portfolio composition explains part of the timing. The company owns upscale, extended-stay and premium-branded, select-service hotels, a segment where business travel demand drives midweek occupancy. Silicon Valley, which the company said contributed 18 percent of trailing-twelve-month adjusted hotel EBITDA, posted the strongest market growth in the quarter.

President and chief executive officer Jeffrey H. Fisher said operating results have been "fantastic this year," tying the growth in EBITDA and FFO per share to top-line gains, margin expansion, share repurchases and capital recycling. Investors tracking hotel demand through the Fazen Markets macro coverage can read the quarter as a data point on business travel, not leisure.

Data — what the numbers show

RevPAR for the four Silicon Valley hotels accelerated 23 percent to $174, and the six-hotel portfolio acquired in March for $92 million produced RevPAR growth of 10 percent to $132. That acquisition followed increases of 9 percent in the second quarter and 5 percent in the first quarter, and the company said the portfolio easily beat underwriting expectations.

Metric	Q3 2026	Q3 2025
RevPAR	$161	$149
Occupancy	83%	79%
ADR	$194	$189
GOP margin	45%	44%
Adjusted hotel EBITDA margin	39%	37%
AFFO per diluted share	$0.46	$0.35
Adjusted EBITDA	$32M	$26M

Within the largest markets, Washington, D.C. RevPAR rose 15 percent to $165 and Dallas climbed 20 percent to $100, while Greater New York slipped 1 percent to $195 and the coastal Northeast fell 3 percent to $259. Thirteen hotels, roughly one-third of the portfolio, recorded double-digit RevPAR growth.

October RevPAR for the 39 hotels climbed 8 percent to $170, an all-time high for the month. Total debt stood at $408 million at September 30, 2026, at an average interest rate of 5.9 percent, and the company reported a leverage ratio of approximately 23 percent based on net debt to hotel investments at cost. Chatham declared quarterly common dividends of $0.10 per share.

Analysis — what it means for lodging REITs and rate-sensitive investors

The company's guidance implies a sharper second half than the first. Chatham guided full-year 2026 RevPAR of $145 to $146, growth of 4.0 to 4.5 percent, adjusted EBITDA of $104.2 million to $105.3 million and adjusted FFO per diluted share of $1.38 to $1.40. Nine-month RevPAR was $149, so the fourth quarter must carry the full-year figure to the top of that range, and the company's October result of $170 supports the arithmetic.

The counter-argument sits in the market mix. Greater New York and the coastal Northeast both declined year over year, and Chatham attributed the New York dip to a tough comparison against a 2025 Ryder Cup benefit at its Holtsville Residence Inn, while a newly opened Homewood Suites weighed on Portsmouth. A portfolio concentrated in a handful of markets carries single-market risk, and Silicon Valley's 18 percent share of EBITDA means its trajectory disproportionately moves the whole.

Chatham's balance sheet gives it optionality. The company has $200 million outstanding on a term loan at 5.1 percent and $65 million drawn on a $300 million revolver at 5.1 percent, and chief financial officer Jeremy Wegner said Chatham has already reduced revolver borrowings by $25 million since closing the Midwest acquisition in March, lessening risk tied to rising rates.

Positioning follows from that mix. Lodging REIT investors comparing Chatham against peers on total shareholder return will note the company's claim that its 2026 returns lead the group, a claim the report attributes to Chatham itself rather than an independent index. The share repurchase plan, $18 million deployed against a $25 million authorization at a weighted-average price of $7.29, has not been tapped since inception of the quarter, leaving room for further buybacks or acquisitions. Rate-sensitive REIT holders watching the Fazen Markets rates dashboard will weigh that floating-rate exposure against the fixed-rate mortgage debt at 7.2 percent.

Outlook — what to watch next

Chatham's renovation program is the near-term operational item. Three hotels, the Residence Inn San Diego Gaslamp, Homewood Suites Farmington, Conn., and Hyatt Place Pittsburgh, Pa., begin renovations in the fourth quarter, part of a $27 million 2026 capital budget. The company has spent approximately $17 million year to date. Disruption from those projects lands in fourth-quarter and 2027 numbers.

The Home2 Suites by Hilton Portland development, which began construction in June, carries expected total costs of approximately $45 million including about 5,500 square feet of commercial space to be sold, with roughly $5 million incurred to date. The company expects the hotel to open in the second quarter of 2028 and to be immediately accretive.

Guidance assumes no additional acquisitions, dispositions, debt or equity issuance, and floating-rate debt priced off the SOFR forward curve. Management said it does not undertake to update guidance for later developments. The fourth-quarter RevPAR print and the pace of the Silicon Valley acceleration are the two figures that will test whether the full-year range holds.

Frequently Asked Questions

What does Chatham Lodging's Q3 2026 result mean for retail investors?

It shows a small-cap lodging REIT converting top-line growth into per-share earnings. Net income to common shareholders doubled to $5 million while adjusted FFO per share rose 31 percent to $0.46, partly because Chatham now adds back share-based compensation in that calculation, a change it applied beginning in 2026 and recast for prior periods. That recast makes year-over-year comparisons cleaner but also flatters the growth rate relative to older reporting.

Why did Chatham's Silicon Valley hotels outperform so sharply?

Chatham said its four Silicon Valley hotels posted RevPAR growth of 23 percent to $174, and its two Sunnyvale properties grew 31 percent. Craven said performance was even better outside the World Cup window because business travelers avoided those dates. Silicon Valley accounted for 18 percent of trailing-twelve-month adjusted hotel EBITDA, so its acceleration lifts consolidated results more than its room count alone would suggest.