Chatham Lodging Trust

Chatham reported Q2 2026 hotel EBITDA of $35.7 million, adjusted EBITDA of $32.7 million, and adjusted FFO of $0.48 per share. Q2 GOP margin was 46.8% and hotel EBITDA margin was 40.8%; GOP margins were up 60 basis points year over year, and hotel EBITDA margins increased 220 basis points, or 330 basis points excluding a $900,000 workers' comp benefit recorded in Q2 2025. Overall RevPAR increased 3.3% in Q2, and July RevPAR increased 9.7%. The Midwest portfolio acquired in March generated RevPAR growth of 8.6% and $3.2 million of hotel EBITDA in Q2. For 2026, management guided to RevPAR growth of 1.5% to 3%, adjusted EBITDA of $99.2 million to $102.3 million, and adjusted FFO per share of $1.28 to $1.34. They expect Q3 RevPAR to increase approximately 4%, while noting the 2025 pro forma RevPAR for the Midwest acquisition would have been $149 in Q3, $129 in Q4, and $140 for the full year.

Jeff Fisher struck an upbeat but measured tone, saying the quarter was strong and that Chatham has increased guidance by approximately 20% since the start of the year. He argued the lodging industry is in the early stages of a protracted upcycle, supported by low supply, solid leisure demand, and accelerating business travel, especially in manufacturing and technology markets. He also highlighted strategic growth levers: the Portland, Maine development, share repurchases, and the newly acquired Midwest portfolio, while acknowledging near-term uncertainty from the Middle East conflict.

Jeremy Wegner focused on the hard numbers and balance sheet strength. He cited Q2 hotel EBITDA of $35.7 million, adjusted EBITDA of $32.7 million, adjusted FFO of $0.48 per share, and margin expansion to 46.8% GOP margin and 40.8% hotel EBITDA margin; excluding the prior-year workers' comp benefit, margins were even stronger year over year. He also said leverage at quarter-end was 31.2% under the credit facility definition, with $225 million available on the revolver, and reiterated full-year guidance of 1.5% to 3% RevPAR growth, $99.2 million to $102.3 million of adjusted EBITDA, and $1.28 to $1.34 of adjusted FFO per share.

Analysts pressed on expense management, July RevPAR strength, the full-year bridge, and the acquisition/disposition outlook. Management said insurance costs were down about 10% for the year, utilities had been helped by longer-term fixed-rate contracts, and repair and maintenance was trending down year over year after prior investment. On the asset sale, Dennis Craven said the disposition is not included in guidance, the company expects proceeds of less than $20 million, and short-term proceeds would likely be used to pay down the credit facility. On the strong July numbers, management pointed to easier Silicon Valley comps and unusually strong corporate transient demand, especially in Sunnyvale.