Chatham Lodging Trust (CLDT): Business Model Canvas [Dec-2025 Updated]

You're looking to understand the core engine of Chatham Lodging Trust, a pure-play lodging REIT that's been actively reshaping its portfolio through 2025. Honestly, their business model is built on owning high-quality, premium-branded extended-stay and select-service real estate-currently 34 hotels totaling 5,166 rooms as of Q3 2025-while maintaining a fortress balance sheet, evidenced by their net debt to EBITDA leverage sitting at just 21%. This disciplined approach to asset management and capital allocation is designed to support their revenue guidance of $293 million to $294 million for the full year, all while delivering those crucial shareholder dividends. Dive into the nine building blocks below to see the mechanics of how Chatham Lodging Trust actually makes its money and manages its risks.

Chatham Lodging Trust (CLDT) - Canvas Business Model: Key Partnerships

You're looking at the network of essential external relationships Chatham Lodging Trust relies on to run its portfolio of upscale, extended-stay and premium-branded, select-service hotels. These partnerships are critical for brand standards, daily operations, and capital access.

Major Hotel Franchisors: Marriott, Hilton, Hyatt

Chatham Lodging Trust's asset value is tied directly to maintaining strong relationships with major global franchisors. These agreements dictate operating standards, which can sometimes require capital expenditures, like upgrades required approximately every seven years per some franchise agreements. The portfolio is heavily weighted toward specific brands across the extended-stay and select-service segments.

The key franchisor relationships include:

• Marriott International brands: Residence Inn by Marriott®, Courtyard by Marriott®, and SpringHill Suites by Marriott®.
• Hilton Worldwide brands: Homewood Suites by Hilton®, Home2 Suites by Hilton®, Hampton Inn and Hampton Inn and Suites by Hilton®, and Hilton Garden Inn by Hilton®.
• Hyatt Hotels Corporation brands: Hyatt House and Hyatt Place®.

Third-Party Hotel Management Companies for Daily Operations

As a self-advised REIT, Chatham Lodging Trust leases its wholly owned hotels to taxable REIT subsidiary lessees, which then contract with third-party management companies for day-to-day operations. The company emphasizes flexibility in this area to increase the universe of potential acquisition opportunities. Island Hospitality Management, LLC ("IHM") is a key operator; as of December 31, 2024, IHM managed all of Chatham Lodging Trust's hotels.

Financial Institutions for the Credit Facility

Access to flexible, cost-effective debt capital is managed through relationships with major financial institutions. In September 2025, Chatham Lodging Trust executed a new senior unsecured credit agreement, upsizing the total capacity to $500 million, with an accordion feature allowing an increase up to $650 million. This facility matures in September 2029.

Here are the specifics of that key financing partnership structure:

The transaction was led by Bank of America Securities, Wells Fargo Securities, Capital One, Regions Capital Markets, and Truist Securities, with JPMorgan Chase and Royal Bank of Canada also serving as lenders.

Institutional and Retail Investors (Shareholders) for Capital

Capital formation relies on attracting and retaining a broad base of shareholders. As of a recent filing, the ownership structure shows a heavy reliance on institutional capital. The company reported 48,974,708 common shares outstanding as of February 26, 2025. The Q3 2025 results showed an Adjusted FFO of $16 million.

The distribution of ownership as of late 2025 is detailed below:

Top institutional holders include Blackrock Inc. holding 14.31%, Vanguard Group Inc. holding 10.52%, and Donald Smith Co Inc. holding 9.47% of the outstanding shares.

Chatham Lodging Trust (CLDT) - Canvas Business Model: Key Activities

You're looking at the core actions Chatham Lodging Trust takes to run its business as of late 2025. These aren't just vague goals; they are concrete financial and operational levers they pull every quarter to manage their portfolio of upscale, extended-stay, and premium-branded, select-service hotels.

Proactive asset management of third-party operators

Chatham Lodging Trust proactively manages its third-party hotel managers to squeeze out maximum operating performance. This means keeping a tight leash on efficiency and cost control, which directly impacts the bottom line you see in their reports. For instance, in the third quarter of 2025, the company achieved a Gross Operating Profit (GOP) margin of 44 percent across its portfolio. That's a key metric showing how well the on-site teams are controlling variable costs like labor and supplies. This focus on operational excellence is crucial, especially when same-property Revenue Per Available Room (RevPAR) dipped by 2.5 percent year-over-year for the 34 comparable hotels in Q3 2025.

Here's a snapshot of the operational results tied to this key activity in Q3 2025:

Strategic portfolio optimization (selling older assets)

The trust actively recycles capital by selling assets that are older or underperforming to reinvest in higher-growth opportunities. This is a constant process of pruning the portfolio. Leading up to 2025, they had sold or put under contract six hotels, averaging 24 years of age, for net proceeds totaling approximately $101 million at a capitalization rate around 6 percent. More recently, in the third quarter of 2025, Chatham entered into a contract to sell one 26-year-old hotel for $17.4 million, with closing expected in the fourth quarter. This activity directly impacts reported revenue; for instance, the Q3 2025 total revenue of $78.4 million reflected a 10.1 percent decrease from Q3 2024, partly due to the impact of these sales.

The asset recycling efforts include specific dispositions:

• Closed on the sale of five hotels under contract for combined proceeds of $83 million by Q1 2025.
• The five hotels sold by Q1 2025 had an average age of 23 years.
• In Q3 2025, the company sold two hotels for combined proceeds of $31 million in the first quarter.
• The sale of five hotels contributed $2 million to the decline in Adjusted EBITDA from $30 million in Q3 2024 to $26 million in Q3 2025.

Capital allocation (e.g., $25 million share repurchase plan)

Managing the balance sheet and returning capital to shareholders are critical activities. Chatham Lodging Trust launched a $25 million share repurchase initiative in May 2025 to optimize its capital structure. By the end of the third quarter of 2025, the company had already repurchased 505,652 common shares year-to-date at a weighted-average price of $6.85 per share, totaling approximately $3.5 million spent. Just in the third quarter alone, they bought back 255,213 shares for an aggregate of about $1.8 million at a weighted-average price of $7.18 per share. This leaves approximately $21.5 million of the original authorization available, though one report suggests $23.0 million remains authorized as of Q3. Also key to capital structure is debt management; the company executed a new, $500 million credit facility in Q3 2025, upsized from the prior $400 million facility.

The capital allocation focus is clear:

• Announced $25 million Share Repurchase Plan in May 2025.
• Year-to-date (through Q3 2025) share repurchase spend: approximately $3.5 million.
• Total debt outstanding as of September 30, 2025, was $343 million.
• Net debt as of September 30, 2025, was $330 million, down from $389 million at year-end 2024.

Property renovations (e.g., Residence Inn Austin, Mountain View)

Maintaining the quality and competitiveness of the physical assets through renovations is a major planned expenditure. Chatham Lodging Trust set its total 2025 capital expenditure budget at approximately $26 million. This budget specifically includes about $16 million earmarked for renovations across three hotels. You can see the execution timeline in action:

The renovation schedule for 2025 involved:

The trust incurred capital expenditures of approximately $7 million in the first quarter of 2025 and approximately $4 million in the third quarter of 2025, contributing to the overall $26 million budget for the year. Also, in Q1 2025, one hotel converted former meeting room space into five additional guest rooms. That's how they actively increase asset value, definitely.

Chatham Lodging Trust (CLDT) - Canvas Business Model: Key Resources

You're looking at the core assets Chatham Lodging Trust (CLDT) holds as of late 2025, the tangible stuff backing the enterprise. The physical real estate portfolio is the engine here, and as of the third quarter of 2025, CLDT owned 34 hotels totaling 5,166 rooms/suites across 15 states and the District of Columbia. This concentration in specific segments is a deliberate choice, focusing on property types that historically offer better operating margins and resilience.

The balance sheet strength is defintely a key resource, giving CLDT the flexibility to navigate market shifts. As of September 30, 2025, the leverage ratio, specifically net debt to hotel investments at cost, stood at approximately 21 percent. That's a low figure for the sector, especially when you see the net debt was $330 million at that same date. This conservative stance means less pressure from interest expense, even with rates where they are.

The recent refinancing of the credit facility significantly bolsters this resource base, providing dry powder for acquisitions or other capital allocation strategies. Here's a quick look at the structure of that new facility, which is a testament to their standing with lenders:

The nature of the real estate itself is a critical, non-fungible resource. Chatham Lodging Trust is focused on specific niches within the lodging industry, which informs everything from property selection to operational strategy. You can see the focus clearly in their asset class:

• Premium-branded upscale extended-stay real estate.
• Premium-branded select-service real estate.
• Hotels in geographically diverse markets.

The interest rate structure on the new facility also matters; the revolving loan bears interest over adjusted term SOFR ranging from 1.5 to 2.25 percent, and the term loan ranges from 1.45 to 2.2 percent. That's a competitive cost of capital, which is a resource in itself.

Chatham Lodging Trust (CLDT) - Canvas Business Model: Value Propositions

Chatham Lodging Trust delivers value through a focused portfolio of high-quality, modern lodging assets strategically located in major US markets characterized by high barriers to entry and strong demand generators for both business and leisure travel.

The core offering centers on two primary hotel categories, ensuring a mix of transient and longer-stay revenue streams. The company is actively managing its physical assets, evidenced by its capital allocation plan for the year.

The 2025 capital expenditure budget is set at approximately $26 million, which includes $16 million earmarked for renovations across three specific properties to maintain and enhance the quality proposition. For instance, the renovation of the Hilton Garden Inn Portsmouth, N.H., was completed in the first quarter of 2025, and Residence Inn renovations in Austin, Texas, and Mountain View, Calif., were slated to commence in the fourth quarter of 2025.

The emphasis on the upscale extended-stay format targets longer-term corporate guests, providing amenities suitable for extended stays, which often translates to more stable occupancy patterns. This focus is reflected in the brands they prioritize.

The value proposition is underpinned by brand consistency, as Chatham Lodging Trust invests in premium-branded, select-service and upscale extended-stay hotels affiliated with major global flags. This affiliation helps ensure brand recognition and access to global marketing programs for third-party managers.

The structure as a Real Estate Investment Trust (REIT) is a key component of the value proposition to shareholders, aiming to deliver attractive returns through property investment, capital appreciation, and the distribution of earnings via dividends. For example, the common dividend per share paid in the third quarter of 2025 was $0.09 per share, representing a yield of 4.98% based on a prior share price, and the full-year 2025 Adjusted FFO per share is projected to be between $0.96 and $0.99.

Here's a look at the portfolio composition supporting these value propositions as of the third quarter of 2025:

The specific hotel types and associated brands that Chatham Lodging Trust invests in include:

• Upscale extended-stay hotels under brands like Residence Inn by Marriott, Homewood Suites by Hilton, Home2 Suites by Hilton, and TownePlace Suites by Marriott.
• Premium-branded, select-service hotels operating under flags such as Courtyard by Marriott, Hampton Inn/Suites, Hilton Garden Inn, Hyatt Place, and SpringHill Suites by Marriott.
• The portfolio also includes an upper upscale Embassy Suites hotel.

The focus on operational excellence helps support the financial returns delivered to shareholders:

• Q3 2025 Hotel EBITDA Margin was 37 percent.
• GOP margin for Q3 2025 was 43.6 percent.
• Labor and benefits cost per occupied room increased only 1.7 percent year-over-year in Q3 2025.

Chatham Lodging Trust (CLDT) - Canvas Business Model: Customer Relationships

You're looking at the relationship layer for Chatham Lodging Trust, which is heavily influenced by the asset-light, third-party operator model. The direct touchpoint you see is filtered through the brand standards they adhere to.

Indirect relationship managed via third-party operators.

Chatham Lodging Trust maintains operational oversight while third-party managers handle the day-to-day guest interactions. The Trust's asset management activities seek to ensure these third-party hotel managers effectively utilize franchise brands' marketing programs. As of the Q3 2025 report, the portfolio comprised 34 comparable hotels.

Loyalty program enrollment through major brand affiliations.

The relationship is inherently tied to the major global brands under which the properties operate, granting access to established customer loyalty programs. The portfolio includes properties under franchise agreements with affiliates of Marriott International, Inc., Hilton Worldwide Holdings, Inc., and Hyatt Hotels Corporation. The portfolio as of early 2025 included 36 hotels totaling 5,475 rooms/suites.

• Residence Inn by Marriott®
• Homewood Suites by Hilton®
• Home2 Suites by Hilton®
• TownePlace Suites by Marriott®
• Courtyard by Marriott®
• Hampton Inn or Hampton Inn and Suites by Hilton®
• Hilton Garden Inn by Hilton®
• SpringHill Suites by Marriott®
• Hyatt Place®
• Embassy Suites®

Focus on high-touch service for extended-stay guests.

The extended-stay segment, which is a primary focus for Chatham Lodging Trust, naturally leans toward a higher-touch service model to cater to longer-term guests. The brands associated with this segment include Residence Inn by Marriott®, Homewood Suites by Hilton®, Home2 Suites by Hilton®, and TownePlace Suites by Marriott®. The overall portfolio occupancy for Q3 2025 was 79 percent, a slight dip from Q2 2025's 82 percent.

Transactional for short-term, select-service stays.

The premium-branded, select-service hotels generally involve more transactional interactions, though still governed by brand standards. The portfolio includes brands like Courtyard by Marriott®, Hampton Inn, Hilton Garden Inn, SpringHill Suites, and Hyatt Place. The Average Daily Rate (ADR) for the entire comparable portfolio in Q3 2025 was $192.

Here's the quick math on the Q3 2025 operational snapshot across the 34 comparable hotels:

The company reported earning net income applicable to common shareholders of $2 million in the 2025 third quarter, with net income per diluted common share at $0.03.

Chatham Lodging Trust (CLDT) - Canvas Business Model: Channels

You're looking at how Chatham Lodging Trust moves its inventory-its rooms-to the customer in late 2025. This is all about getting heads in beds across their portfolio of upscale, extended-stay and premium-branded, select-service hotels. As of September 30, 2025, the company owned 34 hotels totaling 5,166 rooms/suites across 15 states and the District of Columbia.

The effectiveness of these channels is reflected in the third quarter 2025 performance metrics, which show the blended result of all booking sources:

The distribution strategy relies on a mix of high-volume electronic systems and targeted sales efforts. Here's how the primary avenues for booking look:

• Global Distribution Systems (GDS) and major brand reservation systems.
• Direct hotel sales teams targeting corporate accounts.
• Online Travel Agencies (OTAs) and third-party booking sites.
• On-site hotel staff for walk-in and local business.

Global Distribution Systems (GDS) and major brand reservation systems.

Chatham Lodging Trust leverages the massive reach of its franchise partners' central reservation systems (CRS) and the GDS networks used by travel agents globally. These systems are crucial for capturing high-value, pre-planned corporate and group bookings, especially given the focus on upscale, extended-stay properties which cater heavily to business travel. The company's asset management actively seeks to ensure third-party hotel managers effectively use the franchise brands' marketing programs, which are intrinsically linked to these electronic channels. The overall portfolio RevPAR of $151 in Q3 2025 is a direct reflection of the pricing power achieved through these high-visibility channels, even with a slight ADR dip to $192.

Direct hotel sales teams targeting corporate accounts.

For extended-stay hotels, securing long-term corporate contracts is a major driver of stable occupancy. Chatham Lodging Trust's strategy involves proactive management of third-party operators to develop effective sales management policies and plans tailored to secure this direct business. While the exact revenue percentage from negotiated corporate direct sales isn't public, this segment is vital for filling rooms outside of peak leisure periods and maintaining the 79% occupancy rate seen in Q3 2025. The company's focus on markets with strong business demand generators supports the necessity of these dedicated sales efforts.

Online Travel Agencies (OTAs) and third-party booking sites.

OTAs remain a significant, albeit costly, source of demand for the hospitality sector. These platforms provide immediate visibility and drive last-minute bookings. The management's role includes balancing the volume from OTAs against the associated commission costs to ensure the resulting ADR remains attractive. The overall portfolio ADR of $192 in Q3 2025 suggests a managed approach to OTA reliance, aiming to shift bookings toward lower-cost channels where possible. The company is actively managing its portfolio, having sold five hotels between late 2024 and early 2025, which impacts the overall channel mix as new assets are acquired or existing ones are repositioned.

On-site hotel staff for walk-in and local business.

The on-site teams at the 34 hotels are responsible for capturing immediate, local, and transient demand, including walk-ins and last-minute local reservations that bypass the major electronic channels. This channel is particularly important for select-service hotels where on-site efficiency can directly impact GOP margins, which stood at 44% in Q3 2025. Success here contributes directly to the 91.7% room revenue share of total revenue. The company's asset management focuses on operational efficiency to maximize performance from all demand sources channeled through the property level.

Chatham Lodging Trust (CLDT) - Canvas Business Model: Customer Segments

Chatham Lodging Trust's customer base is anchored by demand for upscale extended-stay and premium-branded select-service accommodations across its portfolio of 34 hotels totaling 5,166 rooms as of September 30, 2025.

The primary focus is on segments that drive consistent, often longer-duration, demand, which aligns with the extended-stay nature of many of its properties.

Business travelers and extended-stay guests form the core base, often driven by corporate relocations or project work, which supports the extended-stay model.

• Business travelers are the primary focus, though demand softness was noted around holiday periods in Q3 2025.
• Extended-stay guests are served by the premium-branded select-service focus, catering to longer-duration corporate needs.
• Government and defense-related demand was noted in earlier periods as representing less than 5 percent of overall demand.
• Leisure travelers contribute, especially in coastal and high-demand markets, though specific leisure revenue contribution is not itemized.
• Q1 2025 saw a portfolio occupancy of 72 percent, with Silicon Valley RevPAR up 8 percent for that quarter.

For the second quarter of 2025, the overall portfolio occupancy was a strong 82 percent, with Silicon Valley hotels showing a 3 percent RevPAR increase.

Overall Total Revenue for the three months ended September 30, 2025, was $78.4 million, with room revenue accounting for 91.7 percent of that total.

Chatham Lodging Trust (CLDT) - Canvas Business Model: Cost Structure

You want to see the hard numbers driving Chatham Lodging Trust's costs as of late 2025. Here's the breakdown of the major drains on cash flow, grounded in the latest filings.

Property-level operating expenses (labor, utilities, insurance) are embedded within the overall hotel performance metrics. For context on the scale of operations, Total Revenue for the three months ended September 30, 2025, was $78.4 million. Operating Income for that same period was $9.9 million, reflecting the impact of lower revenue and inflationary cost pressures. You should note that for the third quarter of 2024, Hotel operating expenses were reported at $48.2 million.

The self-advised REIT structure means General and Administrative (G&A) costs are explicitly tracked as cash corporate general and administrative expenses, which are subtracted from Hotel EBITDA to arrive at Corporate EBITDA. For the fourth quarter of 2024 guidance, Chatham Lodging Trust projected these overheads:

Interest expense on debt is a significant fixed charge. While the average rate on total debt as of December 31, 2024, was 6.8 percent, the average rate on total debt outstanding as of June 30, 2025, was lower at 6.5 percent. For the fourth quarter of 2024 guidance, the projected Interest expense (excluding fee amortization) was $7.4 M. Remember, debt service also includes preferred share dividends, which were set at $2.0 million per quarter.

Capital expenditures (CapEx) are planned to maintain the quality of the 34-hotel portfolio. Chatham Lodging Trust budgeted approximately $26 million for its 2025 capital expenditure program. A significant portion of this is earmarked for specific projects:

• Renovations at three hotels are expected to cost approximately $16 million.
• The renovation of the Hilton Garden Inn Portsmouth, N.H., was completed.
• Renovations for the Residence Inn Austin, Texas, and the Residence Inn Mountain View, Calif., were scheduled to commence in the fourth quarter of 2025.

To give you a sense of the debt structure influencing interest costs, here are the figures from the end of 2024:

The self-advised structure, as you know, keeps the management team closely aligned with asset performance, but it means the G&A costs are a direct line item against hotel earnings, unlike a fully externally managed REIT. The leverage ratio as of September 30, 2025, stood at approximately 21 percent, down from 23 percent at the end of 2024.

Chatham Lodging Trust (CLDT) - Canvas Business Model: Revenue Streams

You're looking at the core ways Chatham Lodging Trust brings in cash, which, as you'd expect for a hotel REIT, is heavily weighted toward the rooms people sleep in. This stream is the engine of the whole operation.

Room Revenue is definitely the dominant stream. For the third quarter ended September 30, 2025, room revenue hit $71.9 million out of a total reported revenue of $78.41 million for that period. That works out to be 91.7% of the total revenue for the quarter. That concentration means that anything affecting occupancy or average daily rate (ADR) hits the top line hard.

The other streams are smaller but still important for a select-service and extended-stay portfolio. You see this breakdown clearly when you look at the Q3 2025 figures:

The Food and Beverage revenue stream, typical for select-service operations, was $1.6 million for Q3 2025, showing a year-over-year decline of 14.8%. This segment is smaller, so the percentage impact on the overall business is less severe than a drop in room revenue, but it still reflects softer ancillary spending.

Other operating revenue, which covers things like parking fees and meeting room rentals, totaled $4.6 million in Q3 2025. This stream saw a smaller decline of 3.7% year-over-year. It's worth noting that Chatham Lodging Trust has been actively converting some meeting spaces into guestrooms, which could structurally impact this revenue line going forward.

Looking ahead, the full-year expectation for 2025 shows the scale of the entire operation. Chatham Lodging Trust has provided guidance for Total Hotel Revenue for the full year 2025 to be between $293 million and $294 million. That's the top-line target you need to model against for the full twelve months.

Here are the key takeaways on what drives the top line:

• Room Revenue accounted for 91.7% of Q3 2025 total revenue.
• Total Q3 2025 revenue was $78.41 million.
• Full-year 2025 Total Hotel Revenue guidance is $293 million to $294 million.
• Food and Beverage revenue declined 14.8% in Q3 2025.

Finance: draft 13-week cash view by Friday.