Chatham Lodging Trust (NYSE:CLDT) executives outlined a year of operating margin resilience, balance sheet strengthening and continued capital returns during the company’s fourth-quarter 2025 earnings call held Feb. 25, 2026. Management also provided 2026 guidance that reflects largely flat RevPAR expectations, easier year-over-year comparisons after a challenging first quarter, and ongoing share repurchases.
Fourth-quarter results and margin drivers
For the fourth quarter of 2025, Chatham reported hotel EBITDA of $22.4 million and adjusted EBITDA of $20.2 million, according to CFO Jeremy Wegner. Adjusted FFO was $0.21 per share. The company generated a GOP margin of 40.2% and a hotel EBITDA margin of 33.2%.
COO Dennis Craven added that labor and benefits costs rose just under 2% year over year in the quarter, helping limit the decline in labor-related departmental profit to about 1%. Craven also noted guest acquisition-related commission costs fell by $200,000, benefiting margins by roughly 20 basis points. Non-departmental expenses were described as flat at approximately $21 million.
2025 operating performance and portfolio actions
CEO Jeff Fisher said Chatham outperformed the industry on RevPAR for the fourth consecutive year and “continued pushing” other department operating profits higher. Despite essentially flat RevPAR for the year, Fisher said the company limited GOP margin decline to 20 basis points by focusing on staffing levels and productivity, and he stated that labor and benefits costs “declined slightly” in 2025, offsetting wage increases of almost 4%.
Fisher also highlighted that Chatham “generated the highest operating margins in the industry” for the first time since the pandemic, reclaiming a top ranking it held from 2010 to 2019.
On capital allocation, Fisher said the company sold four older, lower-RevPAR hotels at an approximate 6% cap rate and used proceeds to reduce debt and repurchase shares under a $25 million plan initiated in 2025. Since announcing the plan, Chatham repurchased about 1.8 million shares (around 4% of shares outstanding) at an average price of $6.87 per share, totaling nearly $13 million—“just over half” of the authorization.
Wegner added that Chatham completed four asset sales in 2025 totaling $71.4 million, including the Homewood Billerica, which was sold in late December for $17.4 million. The company’s refinancing and upsizing of its revolving credit facility and term loan in late September, combined with asset sale proceeds, helped it reach what management described as the lowest leverage and highest liquidity levels in its history.
Market performance: Silicon Valley, California, D.C., Texas and others
Management spent significant time discussing market-level performance and drivers. Fisher described Silicon Valley as Chatham’s largest market and said RevPAR grew 1% in 2025, with a stronger first half offset by weaker results later in the year. He cited renovation disruption at the Mountain View Residence Inn and business loss tied to pricing strategies around a single corporate client affecting the two Sunnyvale hotels, though he said the company replaced some of that business in the fourth quarter.
Craven said occupancy at the four Silicon Valley hotels was 72% in the quarter and ADR increased 2.5%. He also said the shutdown impact on the company’s three D.C.-area hotels accounted for about 60% of the quarterly RevPAR decline.
In California, Craven noted:
- San Diego: RevPAR declined 8% in 2025, driven by a step-down from a strong 2024 convention calendar, the opening of a nearby Gaylord property, and a border shutdown that reduced government business at the hotel. The 2026 convention calendar was described as similar to 2025 (43 conventions in 2026 versus 46 in 2025).
- Los Angeles: RevPAR at the company’s three hotels increased 4% in 2025, helped by “significant fire-related business,” especially at the Woodland Hills Home2 from January through early May. Craven also cited softer conditions later in the year due to “general unrest” in the area.
Elsewhere, Craven said Dallas and Austin were pressured by convention center renovations and expansion, while San Antonio had a weaker convention calendar in 2025. He also highlighted that Chatham’s Home2 in Phoenix posted about 17% RevPAR growth in the quarter as the hotel gained market share and participated in group blocks tied to nearby venues.
2026 outlook: RevPAR range, easier comps after Q1, and cost expectations
For full-year 2026, Wegner guided to RevPAR of negative 0.5% to positive 1.5%, adjusted EBITDA of $84 million to $89 million, and adjusted FFO per share of $1.04 to $1.14. He said the company’s guidance excludes non-cash stock-based compensation from adjusted FFO beginning Jan. 1, 2026, to align with how most lodging REIT peers present the measure.
Wegner noted that 2025 results included about $2.6 million, or $0.05 per share, of one-time benefits from various refunds that are not expected to repeat in 2026. He also said the 2026 outlook assumes SOFR declines based on the forward curve, and that quarterly interest expense is expected to decline over the course of the year; the company has $200 million of floating-rate debt.
Craven provided market-level expectations embedded in guidance, including projected Silicon Valley RevPAR growth of 3% to 5%, D.C. up 2% to 4% as comparisons ease, and Los Angeles down 1% to 3% due to tough comparisons against 2025 wildfire-related demand. Dallas was expected to be down mid-single digits due to convention center work, while Bellevue was expected to grow mid-to-upper single digits as it laps renovation disruption and sees increased corporate demand.
On expenses, management said wage pressures appear to be moderating. Fisher stated that wage increases for the second half of 2025 were about 2% versus the first half, which he said suggests wage pressures are easing into 2026. In the Q&A, Craven pointed to potential first-quarter utility pressure tied to winter storms, but said other operating expenses appeared relatively stable, with labor remaining the key focus.
Capital allocation priorities: buybacks, selective sales, potential acquisitions, and development
Management reiterated that share repurchases remain a priority and said guidance does not assume any buybacks or acquisitions. Fisher said the company intends to use “most, if not all,” of the remaining $25 million repurchase plan during 2026.
On portfolio reshaping, Craven said the company may have “one or two more” assets it will look to sell opportunistically in 2026, following what he characterized as meaningful trimming over the past 18 months.
Fisher said the company remained patient on acquisitions in 2025, but expects more opportunities in 2026 as financing costs ease and seller expectations adjust, while noting that potential deals must make sense relative to the implied yield of repurchasing the company’s own stock. He also said the company expects to commence development in Portland, Maine, in the coming months, with an opening planned before the summer of 2028, and that the development cost is not included in the company’s 2026 CapEx guidance. Management said it expects to provide more detailed cost and timing guidance on the project on a future call.
About Chatham Lodging Trust (NYSE:CLDT)
Chatham Lodging Trust is a self-advised, publicly traded real estate investment trust (REIT) focused primarily on investing in upscale, extended-stay hotels and premium-branded, select-service hotels. The company owns 39 hotels totaling 5,915 rooms/suites in 16 states and the District of Columbia.
