Chatham Lodging Rides an Extended-Stay Boom to Record Quarter

Most hotel guests check in for a night or two. A growing group of travelers needs a room for a week, a month or longer: consultants on project work, nurses on travel contracts, families between homes, and crews building data centers or factories. The hotel industry serves them with extended-stay hotels, which offer suites with kitchens, laundry and extra living space, usually at a lower daily cost than a full-service hotel. Premium-branded select-service hotels are close cousins, with familiar brand names and modern rooms but without the ballrooms, restaurants and room service of larger properties.

That lean setup appeals to owners. Fewer restaurants and smaller staffs mean more of each revenue dollar can reach the bottom line. Longer stays also bring steadier occupancy, and extended-stay hotels have historically held up better than the broader industry during downturns. 

The figure the industry watches most closely is RevPAR, or revenue per available room, which combines how full a hotel is with what it charges. After U.S. RevPAR slipped 0.3% in 2025, the first decline outside a recession on record, CoStar and Tourism Economics now expect growth of 4.4% this year, helped by business travel, leisure demand and the World Cup. They see a slower 2.1% gain in 2027. 

Extended-stay hotels have done even better. The Highland Group reported that segment demand rose 6% in the second quarter, the biggest quarterly jump since early 2022, while RevPAR climbed 4.2%. Occupancy reached 77.3%, more than 11 points above comparable hotel classes. 

Supply is the other half of the story. High interest rates and building costs have made new hotels harder to finance. Extended-stay rooms under construction fell 30% from a year earlier to about 27,500, and CoStar expects total U.S. hotel supply to grow less than 1% in both 2026 and 2027. When demand grows faster than the number of rooms, owners gain pricing power. 

Chatham Lodging Trust (NYSE: CLDT) is one owner feeling that lift. The Florida real estate investment trust owns 39 hotels with 5,610 rooms across 18 states and Washington, D.C., and today it reported third quarter results that show what a favorable backdrop can do. 

RevPAR at its 39 comparable hotels rose more than 8% to $161, a third quarter record for the company. Occupancy reached 83%, its highest quarterly level since 2019, and the average daily rate rose to $194. Thirteen hotels, about a third of the portfolio, posted double-digit RevPAR gains. 

Silicon Valley, its largest market by earnings, led the way with RevPAR up 23%. Washington, D.C. hotels gained 15% as government and corporate travel rebounded from last year’s shutdown disruption. Six hotels bought in March for $92 million also beat expectations, with RevPAR up 10%. 

Tight cost control turned that revenue into profit. The adjusted hotel EBITDA margin rose 1.9 points to 39%, and adjusted EBITDA increased 21% to $32 million. Adjusted funds from operations, the cash flow measure REIT investors use in place of earnings, rose 31% per share to $0.46 from $0.35. 

Investors have noticed. The shares are up about 119% this year, and chief executive Jeffrey Fisher said the company’s total shareholder return leads all lodging REITs in 2026. He pointed to a balance sheet with leverage of roughly 23% of hotel cost, room to buy hotels or repurchase stock, and a Home2 Suites hotel in Portland, Maine, due to open in 2028. 

The harder question is what comes next. Full-year guidance calls for RevPAR of $145 to $146 and adjusted FFO of $1.38 to $1.40 per share, and October RevPAR rose 8% to a record for the month. Still, part of this year’s strength came from easy comparisons and one-time events, and forecasters expect industry growth to slow in 2027. Whether limited new supply can keep extended-stay hotels ahead of that slowdown will decide how much of this year’s rally holds up.