Chatham Lodging Trust Reports Weaker 2025 Performance Amid Tourism Drop

Chatham Lodging Trust, a real estate investment trust (REIT) specializing in upscale, extended-stay hotels, has reported its third quarter results for 2025 and noted a slight dip in some of its performance metrics. The fall-off in foreign and domestic tourism, especially in large metropolitan markets, has negatively impacted some of the key performance indicators including wide area room revenue, RevPAR. Currently, the company has 34 hotels in the United States, mostly in the extended-stay segment of the market.

For the third quarter of 2025, working with the latest inflation-adjusted figures, the company recorded a dip of Double deflation RevPAR to the tune of Flags 2.5 percent. The RevPAR decline for a specific geo-region has tourism and convention recovery issues. Without a doubt, the Washington, DC area, which has suffered in the past, is starting to lose some of its RevPAR which is about 6 percent lower and suffered the indirect consequences of ultra-low government travel to a portion of the city’s hotels.

Weakened Tourism Impact on Key Markets

The third quarter results underscore a larger trend in the US lodging industry, with many cities experiencing diminished tourism levels. Areas such as Washington, DC, San Diego, Austin, and Dallas struggled due to various factors, including construction disruptions and a lack of corporate demand. Washington, DC’s tourism sector, which often benefits from government-related travel, suffered significantly. The reduced demand from government agencies ahead of potential shutdowns has led to lower occupancy rates and room prices, further impacting the hotel industry’s performance.

Meanwhile, Chatham Lodging’s largest markets, including Silicon Valley, Los Angeles, and San Diego, showed varied results, with Los Angeles seeing a decrease in RevPAR by 3 percent, and San Diego down by 10 percent. The decline in these core regions was also attributed to broader market trends affecting tourism and business travel, with several convention centres undergoing renovations, further dampening corporate travel prospects.

Stronger Performance in the Coastal Northeast and Greater New York Markets

Despite the challenges in major cities, some regions within Chatham’s portfolio reported more promising results. The Coastal Northeast, including markets like Portsmouth, experienced a 2 percent increase in RevPAR, driven by rising demand following significant hotel renovations. The Hampton Inn in Portland, part of the Coastal Northeast region, set an all-time quarterly high of 354 dollars in RevPAR. Additionally, Chatham’s Greater New York market posted an 8 percent increase in RevPAR, with particular gains coming from the Holtsville Residence Inn, which saw a 28 percent increase in room revenue, thanks to events such as the Ryder Cup.

Adjusted Financials Reflect Operational Efficiencies

Chatham Lodging also reported a drop in adjusted EBITDA to 26 million dollars for the third quarter of 2025, down from 30 million dollars in the same period of 2024. Despite the overall decline in revenue, the company was able to achieve adjusted FFO of 16 million dollars, only slightly down from the previous year’s 18 million dollars. This can be partly attributed to operational efficiencies, such as labour cost management and lower-than-expected property tax expenses.

The company’s strategy of focusing on extended-stay properties continues to provide some resilience in this challenging environment. Extended-stay hotels, which represent the highest share of Chatham’s hotel investments, performed relatively better in markets with stable, long-term demand. These properties have a unique ability to cater to both business and leisure travellers seeking longer stays.

Tourism Slowdown and Future Outlook

Chatham’s performance reflects the broader slowdown in the US tourism sector in 2025. Despite weak corporate travel and fluctuating leisure demand, the company remains committed to optimizing its operations and strategically managing its portfolio. Its financial flexibility was bolstered by a 500 million dollars credit facility secured earlier this year, which provides additional liquidity to navigate the fluctuating market conditions.

Looking ahead to the fourth quarter of 2025, the company has forecasted a decline in RevPAR of 3.5 percent to 2.5 percent as a result of continued softness in the tourism market, especially in major cities that depend on conventions and corporate travel. In particular, markets like Washington, DC are expected to continue facing challenges, with forecasts predicting a further dip in room rates and occupancy due to ongoing political uncertainty and government budget constraints.

Adapting to Changing Tourism Trends

Chatham Lodging Trust reports Q3 2025 results amidst a difficult travel climate with decreased demand across vital areas. Yet, the extended-stay portfolio continues to be a stabilizing influence, and the company’s renovation spending on hotel improvements does lend cautious optimism. Chatham will need to further retool its approach to profitability as evolving tourism continues to transform travel and travel-related business behavior as well as government business travel.

The post Chatham Lodging Trust Reports Weaker 2025 Performance Amid Tourism Drop appeared first on Travel And Tour World.