• Chatham Lodging Trust is like the Simon Property Group (SPG) for upscale hotels.
• Think of Chatham Lodging Trust as a major landlord that owns hotel properties, rather than a company that operates hotel brands like Marriott or Hilton.

• Upscale, Extended-Stay Hotel Accommodation: Providing lodging services for guests seeking longer stays, often including in-room kitchen facilities and other home-like amenities.
• Premium-Branded, Select-Service Hotel Accommodation: Offering high-quality lodging services through well-known hotel brands that focus on essential amenities and efficient service without extensive full-service offerings.

Chatham Lodging Trust (CLDT) operates hotels and, as such, sells primarily to individuals and businesses who book stays at its properties. Its major customer categories are:

1. Business Travelers: Individuals traveling for work, including corporate guests, consultants, project teams, and those on extended assignments requiring upscale accommodations with amenities suitable for longer stays.
2. Leisure Travelers: Individuals, couples, and families booking stays for vacations, weekend getaways, special events, or other personal travel, seeking premium-branded, select-service hotel experiences.
3. Extended-Stay Guests (Non-Business): Individuals requiring temporary housing due to personal circumstances such as home renovations, relocations, or other transitional living situations, who benefit from the extended-stay hotel model.

Marriott International, Inc. (MAR)
Hilton Worldwide Holdings Inc. (HLT)
Hyatt Hotels Corporation (H)

1. Interest Rate Risk and High Debt Load: As a real estate investment trust (REIT), Chatham Lodging Trust relies on significant borrowings for its property investments. Rising interest rates directly increase the company's interest expenses, which can substantially impact profitability and cash flow. Chatham Lodging Trust has a material debt load, and its net interest expense has increased due to high interest rates, consuming a significant portion of its operating income.
2. Economic Cyclicality and Volatility in Travel Demand: The performance of Chatham Lodging Trust is highly sensitive to overall economic conditions, consumer spending, and travel demand, encompassing both leisure and business travel. Fluctuations in these factors directly affect key metrics such as occupancy rates, average daily rates (ADR), and revenue per available room (RevPAR). Hospitality REITs face a heightened risk of external disruptions due to their reliance on human movement, as seen with past public health crises like COVID-19, which caused sharp reductions in occupancy rates and cash flows. Changes in business travel patterns, potentially influenced by increased remote work, also pose an ongoing risk.
3. Competition and Operating Expenses: The hotel industry is intensely competitive, requiring continuous investment in property maintenance, updates, and technology to remain attractive to guests. Hotel REITs, including Chatham Lodging Trust, face inherent operational challenges such as oversupply in certain markets, the need for regular property refreshment to stay competitive, and managing often unpredictable operating costs.

The acceleration and normalization of remote work and virtual collaboration technologies, leading to a potentially sustained reduction in business travel and corporate group events.

For Chatham Lodging Trust, which primarily invests in upscale, extended-stay hotels and premium-branded, select-service hotels, the addressable market for these segments in the U.S. is substantial.

U.S. Extended-Stay Hotel Market

The U.S. extended-stay hotel market was valued at approximately USD 19.3 billion in 2024. Other estimates place the market size at around USD 22.8 billion in 2024 and USD 22.91 billion in 2024. This market is projected to reach USD 21.7 billion by 2025 and could grow to USD 37.3 billion by 2030 with a compound annual growth rate (CAGR) of 8.7% from 2025 to 2030. Some projections indicate even higher growth, with the market reaching USD 65.95 billion by 2034 at a CAGR of 12.3%.

Within the extended-stay segment, luxury/upscale extended-stay hotels held a significant market share of 75.92% in 2023, indicating a strong presence for the upscale focus of Chatham Lodging Trust.

U.S. Select-Service Hotel Market

The distinction between select-service and extended-stay hotels has increasingly blurred, with the two sectors converging into a unified market. This combined sector boasts over 200 brands and has seen significant investor interest due to its robust performance and operational efficiency. In 2024, the U.S. select-service and extended-stay hotel sector saw its RevPAR (revenue per available room) reach a record high of USD 78.

Overall U.S. Upscale Hotel Market Context

More broadly, the luxury and upscale segment accounted for about 61% of the total U.S. hotel market in 2024, which was estimated at USD 263.21 billion. This demonstrates the significant size of the broader upscale market in which Chatham Lodging Trust operates its extended-stay and select-service properties. The North American luxury hotel market alone was valued at USD 54.25 billion in 2025.

Chatham Lodging Trust (CLDT) is expected to drive future revenue growth over the next 2-3 years through several key strategies and market dynamics:

1. RevPAR Growth in Key Markets: The company anticipates continued growth in Revenue Per Available Room (RevPAR), particularly driven by strong demand in its primarily tech-driven hotel markets. For example, Chatham Lodging Trust projected RevPAR growth of 2.5% to 4% for Q2 2024, with April RevPAR showing a 5% increase over 2023 levels. Management expects to outperform the industry in 2024 due to surging demand in these tech-centric locations, with tech hotel RevPAR up 12% in April. While 2026 RevPAR growth is projected to be modest at -0.5% to +1.5%, the expectation is for positive growth over the remainder of the year after a challenging first quarter.
2. Strategic Acquisitions of High-Growth Hotels: Chatham Lodging Trust plans to enhance its portfolio by selling older, lower-performing hotels and reinvesting the proceeds into acquiring higher-growth, higher RevPAR, and higher-margin properties. This strategy aims to improve overall shareholder value and cash flow. The company noted an increase in deal volume for hotel investments and anticipated announcing an acquisition in Q1 2024.
3. Property Renovations and Capital Investments: Ongoing capital expenditures and planned renovations across its hotel portfolio are expected to refresh properties, improve guest experience, and enable stronger pricing power. Significant renovations were planned for several hotels in 2024, including the Courtyard Dallas Addison, and Residence Inns in Austin and San Diego. The company has allocated approximately $26 million for capital expenditures in 2026, which includes three major hotel renovations.
4. Effective Expense Management and Stabilizing Costs: While not a direct revenue driver, the stabilization of operating costs, particularly labor and benefits, allows for a greater flow-through from revenue to profitability and frees up capital for growth initiatives. Chatham Lodging Trust has observed a stabilization of major cost increases experienced in the second half of the previous year, with average hourly wages in Q1 2024 remaining essentially unchanged from Q3 and Q4 2023. This disciplined expense control has helped mitigate RevPAR declines.
5. Demand from Special Events and Business Travel: Specific events, such as the upcoming World Cup, are expected to boost demand in key markets like Sunnyvale, Los Angeles, and Dallas, contributing to increased revenue. Additionally, underlying business travel demand in markets representing over half of the company's trailing 12-month EBITDA generated RevPAR growth between 5% and 10% in Q2 2024, indicating a healthy environment for corporate and extended-stay bookings.

Share Repurchases

• Chatham Lodging Trust implemented a $25 million share repurchase plan in 2025, acquiring 1.3 million shares for $9 million during the year.
• As of February 25, 2026, the company had repurchased approximately 1.8 million shares for almost $13 million, representing over half of the authorized $25 million plan.
• In the fourth quarter of 2025 alone, the company repurchased 1.0 million common shares for approximately $7.0 million.

Share Issuance

• In June 2021, Chatham Lodging Trust issued $120 million of preferred equity and $25 million of common equity.
• An "at-the-market" equity offering program was established in January 2021, allowing for the public offer and sale of common shares up to an aggregate offering price of $100 million.

Outbound Investments

• In March 2026, Chatham Lodging Trust acquired six Hilton-branded hotels comprising 589 rooms for $92 million, funded with available cash and borrowings.
• Over the 18 months leading up to March 2026, the company sold six older hotels for approximately $100 million as part of an asset recycling strategy.
• During the second quarter of 2022, Chatham sold four hotels comprising 537 rooms for aggregate proceeds of approximately $80 million.

Capital Expenditures

• Chatham Lodging Trust's capital expenditure budget for 2026 is approximately $26 million, including renovations at three hotels estimated to cost around $17 million.
• For 2025, the capital expenditure budget was approximately $26 million, with actual expenditures expected to be around $25 million, which included renovations at properties such as the Residence Inn Austin and Residence Inn Mountain View.
• The 2024 capital expenditure budget was approximately $37 million, with capital improvements totaling $30.6 million for the year.