[Management View]
Chatham Lodging Trust emphasized ongoing portfolio reshaping through opportunistic hotel sales and share repurchases. Management highlighted maintaining low leverage and robust liquidity by increasing its revolving credit facility and term loan. Operationally, cost control efforts limited margin declines despite challenging RevPAR trends, with select markets delivering substantial RevPAR growth.

[Outlook]
Q4 2025 RevPAR is forecasted at minus 3.5% to minus 2.5%, with adjusted EBITDA projected between $16.7 million and $18.3 million. Full-year RevPAR growth is expected between minus 0.7% and minus 0.3%. Management anticipates favorable long-term industry fundamentals, with limited supply growth expected to remain under 1% in core markets for the next year.

[Financial Performance]
Hotel EBITDA reached $28.8 million; adjusted EBITDA was $26.2 million; adjusted FFO totaled $0.32 per share. GOP margin declined by 90 basis points to 43.6%. Labor and benefits cost per occupied room rose by only 1.7%.

[Q&A Highlights]
Question 1: Can you provide more color on what you are seeing in the acquisition market? Are there opportunities to redeploy capital into acquisitions in the future?
Answer: With RevPAR turning negative, there are opportunities as cap rates are now north of 8%. Management is looking to create long-term shareholder value with acquisitions that will grow at least as well as the existing portfolio. Some newer assets are coming up on their first wave of renovations, which might spur more activity.

Question 2: Can you remind us of the timing of the Portland, Maine development?
Answer: Site work will start in 2026 with a 21 to 24-month construction timeline, targeting an early 2028 opening. The seasonality and results of the existing asset dictate careful planning around construction timing.

Question 3: What drove the variance in RevPAR performance, and what caused the shortfall?
Answer: The shortfall was due to the decision on the two Sunnyvale hotels and the government shutdown impact on August and September. The two Sunnyvale hotels, which are 10% of the room count, were down 9% in the quarter. The government shutdown led to a 9% decline in RevPAR at the three DC hotels in August and September.

Question 4: Why is the Q4 RevPAR guidance worse than Q3?
Answer: The decline is primarily due to the three DC hotels, which reduced October RevPAR by approximately 200 basis points. Excluding these, RevPAR was down only 1% for October.

Question 5: How is the convention business shaping up for next year in key markets, and what is the supply outlook?
Answer: Austin and Dallas will maintain their current levels until 2027. San Diego had an all-time year last year and will have a similar year next year. The supply outlook for core markets is less than 1% and is projected to remain that way next year.

Question 6: How were you able to achieve strong margin performance despite the challenging environment?
Answer: Focus on day-to-day management of headcount and productivity, particularly in housekeeping. Wage increases have stabilized at about 2% year-over-year post-July 1. The availability to hire labor has been stable for the past 12 to 18 months.

Question 7: What are your priorities for capital allocation given the strong balance sheet and liquidity?
Answer: The first priority is active share repurchases, with a $25 million plan in place. The next priorities are acquiring hotels and the Home 2 Portland development.

Question 8: Why pursue the Portland development when the stock is trading at a significant discount to development costs?
Answer: Each opportunity is assessed individually. The Portland market is restrictive on new hotel development and popular, with high RevPARs and margins. The development is expected to add long-term value to the portfolio.

Question 9: How do you allocate capital between share repurchases and acquisitions?
Answer: The decision is based on the yields and growth potential of acquisitions compared to the current portfolio and the impact on distributable cash flow.

[Sentiment Analysis]
Analysts were focused on understanding the strategic rationale behind capital allocation decisions, particularly in light of the challenging RevPAR environment and the government shutdown's impact. Management maintained a cautiously optimistic tone, emphasizing long-term value creation and disciplined capital deployment.

[Quarterly Comparison]
| Metric | Q3 2025 | Q3 2024 |
|-------------------------|---------------|---------------|
| Hotel EBITDA | $28.8 million | N/A |
| Adjusted EBITDA | $26.2 million | N/A |
| Adjusted FFO per share | $0.32 | N/A |
| GOP Margin | 43.6% | N/A |
| RevPAR Growth | -2.5% | N/A |

[Risks and Concerns]
- Continued government shutdowns impacting travel demand.
- Volatility in RevPAR trends due to external factors like tariff threats and international travel declines.
- Potential challenges in acquiring new assets at favorable terms.

[Final Takeaway]
Chatham Lodging Trust is navigating a challenging environment with strategic capital allocation, focusing on opportunistic hotel sales, share repurchases, and disciplined acquisitions. Despite short-term headwinds, management remains optimistic about long-term industry fundamentals and is committed to enhancing shareholder value through careful investment and cost control.