Cuộc họp báo cáo kết quả kinh doanh Quý 3 năm 2026 của Chatham Lodging Trust (CLDT): RevPAR tăng 8.3%, nâng định hướng

Điểm nhấn chính

• Chatham Lodging Trust công bố RevPAR quý 3/2026 đạt 161 USD, mức kỷ lục theo quý từ trước đến nay, với mức tăng trưởng RevPAR 8,3% và tỷ lệ lấp đầy danh mục đạt 83%—mức lấp đầy theo quý cao nhất kể từ năm 2019.
• EBITDA khách sạn đạt 35,7 triệu USD, trong khi EBITDA điều chỉnh đạt 31,9 triệu USD. FFO điều chỉnh tăng 31% so với cùng kỳ năm trước lên 0,46 USD/cổ phiếu.
• Biên EBITDA khách sạn mở rộng 190 điểm cơ bản lên 38,7%, nhờ năng suất lao động, kiểm soát chi phí và lợi nhuận cao hơn từ dịch vụ đỗ xe, phí hủy phòng cùng hoạt động quầy đồ ăn tiện lợi.
• Thung lũng Silicon dẫn đầu đà tăng trưởng của danh mục. RevPAR tăng 23%, EBITDA khách sạn tăng 51% và biên EBITDA khách sạn mở rộng 740 điểm cơ bản lên gần 43%.
• Ban lãnh đạo đã nâng mức trung vị trong dự báo FFO điều chỉnh cả năm ban đầu từ 1,09 USD lên 1,39 USD/cổ phiếu. Dự báo hiện tại cho năm 2026 là 1,38 đến 1,40 USD/cổ phiếu.
• Công ty dự kiến dòng tiền tự do năm 2026 đạt khoảng 25 triệu USD sau khi trừ cổ tức và chi phí vốn cho bảo trì, cải tạo, qua đó tạo nguồn lực cho hoạt động phát triển dự án, thâu tóm, giảm nợ, mua lại cổ phiếu hoặc tăng trưởng cổ tức.

Dữ liệu tài chính cốt lõi

Hiệu quả kinh doanh và vận hành

Du lịch công tác, phân khúc đóng góp khoảng 75% EBITDA của Chatham, là động lực thúc đẩy nhu cầu chính. Khoảng 85% số khách sạn của công ty ghi nhận tăng trưởng RevPAR, 80% tăng ADR và 13 trên tổng số 39 khách sạn đạt mức tăng trưởng RevPAR hai chữ số.

Thung lũng Silicon đóng góp 250 điểm cơ bản vào mức tăng trưởng RevPAR chung của quý 3. Bốn khách sạn tại thị trường này ghi nhận tỷ lệ lấp đầy gần 85%, trong khi sản lượng phòng từ các khách hàng lớn nhất tăng 22% đến 29% tại các cơ sở Mountain View và Sunnyvale, và tăng hơn 50% tại San Mateo. RevPAR của Thung lũng Silicon trong tháng 10 vẫn cao hơn khoảng 18% so với cùng kỳ năm trước, với tỷ lệ lấp đầy gần 80%.

Ban lãnh đạo cho biết việc đưa hai khách sạn tại Sunnyvale trở lại mức RevPAR năm 2019 có thể đóng góp thêm từ 4 triệu đến 5 triệu USD FFO, tương đương 0,08 đến 0,10 USD/cổ phiếu. Đây vẫn là cơ hội phục hồi tiềm năng chứ chưa phải dự báo chính thức.

Bên ngoài Thung lũng Silicon, RevPAR tại Dallas và Washington, D.C. lần lượt tăng 20% và 15%. Năm khách sạn hội nghị của Chatham ghi nhận mức tăng trưởng RevPAR 15%, bao gồm mức tăng 34% ở Dallas, 20% ở Austin và 21% ở San Antonio. Bảy khách sạn phục vụ chủ yếu cho khách du lịch nghỉ dưỡng của công ty ghi nhận mức tăng trưởng khoảng 1%.

Danh mục tại vùng Trung Tây được thâu tóm vào tháng 3 đã mang lại mức tăng trưởng RevPAR 9,8% và 3 triệu USD EBITDA khách sạn. Lũy kế từ đầu năm đến hết tháng 9, danh mục trị giá khoảng 100 triệu USD này tạo ra mức tăng trưởng RevPAR 8% và mở rộng biên GOP thêm 140 điểm cơ bản lên 48%.

Đà tăng chi phí đã được kiềm chế nhờ các điều chỉnh thường xuyên về số giờ làm việc của nhân viên, hoạt động thu mua và các chi phí vận hành khác. Chi phí nhân công và phúc lợi trên mỗi phòng có khách tăng 2,9%, bất chấp tỷ lệ lấp đầy tăng từ 81% trong quý 2 lên 83% trong quý 3. Lợi nhuận từ các bộ phận vận hành khác tăng 23% lên 3,9 triệu USD, bao gồm mức tăng 12% lợi nhuận bãi đỗ xe và phí hủy phòng tăng gấp đôi lên gần 500.000 USD.

Dự báo của ban lãnh đạo

Ban lãnh đạo mô tả các giả định cho tháng 11 và tháng 12 là thận trọng, ngụ ý mức tăng trưởng RevPAR ở mức một chữ số thấp. RevPAR tháng 10 tăng 7,9%, nhưng công ty dự kiến sẽ có sự giảm tốc thông thường theo mùa tại Thung lũng Silicon vào dịp Lễ Tạ ơn và các kỳ nghỉ lễ cuối năm.

Chatham dự kiến sẽ tài trợ cho dự án phát triển khách sạn Home2 Suites tại Portland, Maine mà hầu như không cần vay thêm vốn. Khách sạn dự kiến khai trương vào năm 2028 và theo ban lãnh đạo, sẽ đóng góp tích cực vào lợi nhuận.

Rủi ro và các yếu tố cần theo dõi

• Các khách sạn tại Thung lũng Silicon thường giảm tốc từ giữa tháng 11 đến cuối tháng 1 hoặc đầu tháng 2, tạo áp lực theo mùa lên nhu cầu quý 4.
• Khách sạn Residence Inn San Diego Gaslamp Quarter đã bắt đầu cải tạo, điều này có thể ảnh hưởng đến kết quả hoạt động trong ngắn hạn. Ban lãnh đạo dự kiến sẽ cải tạo khoảng năm khách sạn mỗi năm trong vài năm tới.
• Nhu cầu du lịch nghỉ dưỡng vẫn yếu hơn tại một số thị trường nhất định. RevPAR giảm 4% tại Savannah SpringHill Suites và giảm 6% tại Hilton Garden Inn Portsmouth, nơi ban lãnh đạo chỉ ra nguyên nhân là do nhu cầu nghỉ dưỡng suy yếu từ du khách Canada và nguồn cung mới xuất hiện lân cận.
• Dallas và Austin tiếp tục hoạt động trong bối cảnh các trung tâm hội nghị phần lớn hoặc gần như đóng cửa, dù cả hai thị trường đều ghi nhận mức tăng trưởng mạnh mẽ trong quý 3.
• Ban lãnh đạo lưu ý rằng một phần mức tăng trưởng của ngành trong năm 2026 đã hưởng lợi từ mức nền so sánh thấp của năm trước và những gián đoạn bên ngoài có thể không lặp lại vào năm 2027.
• Một khách sạn đang trong hợp đồng chuyển nhượng với giá khoảng 11,5 triệu USD, nhưng ban lãnh đạo cho biết việc hoàn tất trước cuối năm vẫn phụ thuộc vào điều kiện hoàn tất giao dịch.

Điểm nhấn phiên hỏi đáp với chuyên gia phân tích

Ban lãnh đạo cho biết tỷ lệ lấp đầy tại Thung lũng Silicon vẫn còn dư địa tăng trưởng. Trong lịch sử, các khách sạn từng đạt mức từ trên 85% đến 90% trong các quý 2 và quý 3 có kết quả kinh doanh tốt hơn, so với mức gần 85% trong quý 3/2026.

Đối với năm 2027, ban lãnh đạo kỳ vọng du lịch công tác và hoạt động đầu tư vốn sẽ tiếp tục là động lực nhu cầu quan trọng, đặc biệt là tại Thung lũng Silicon, vùng Trung Tây và vùng Đông Nam. Chatham cũng nhấn mạnh mức độ tập trung vào phân khúc lưu trú dài ngày: 66% số khách sạn của công ty là cơ sở lưu trú dài ngày, giúp định vị danh mục đón đầu nhu cầu dài hạn từ các doanh nghiệp và dự án.

Các dự án cải tạo đang được giãn tiến độ nhằm tránh việc phải tạm ngừng hoạt động nhiều khách sạn lớn cùng lúc. Một cơ sở tại Sunnyvale dự kiến cải tạo trong giai đoạn từ tháng 11 đến tháng 2 bắt đầu từ quý 4/2027, tiếp theo là khách sạn Sunnyvale thứ hai vào năm sau đó và San Mateo sau cùng. Ban lãnh đạo kỳ vọng các bất động sản được cải tạo tại Thung lũng Silicon sẽ hỗ trợ tăng trưởng ADR.

Toàn văn biên bản cuộc họp công bố kết quả kinh doanh

Toàn văn cuộc gọi công bố kết quả kinh doanh

Phần trình bày của ban lãnh đạo

Operator

Good morning, everyone, and thank you for standing by. My name is Jill, and I will be your operator for today. At this time, I would like to welcome each and every one of you to the Chatham Lodging Trust Third Quarter 2026 Financial Results Conference Call.

[Operator Instructions]

I will now turn the call over to Chris Daly, President of Daly Gray Public Relations. Please go ahead.

Chris Daly

Thank you, Jill. Good morning, everyone, and welcome to the Chatham Lodging Trust Third Quarter 2026 Results Conference Call. Please note that many of our comments today are considered forward-looking statements as defined by federal securities laws. Statements are subject to risks and uncertainties, both known and unknown, as described in our most recent Form 10-K and other SEC filings. All information in this call is as of November 5, 2026, unless otherwise noted, and the company undertakes no obligation to update any forward-looking statement to conform the statement to actual results or changes in the company's expectations.

You can find copies of our SEC filings and earnings release, which contain reconciliations to non-GAAP financial measures referred to on this call, on our website at chathamlodgingtrust.com. Now, to provide you with some insight into Chatham's 2026 third quarter results, allow me to introduce Jeff Fisher, Chairman, President, and Chief Executive Officer; Dennis Craven, Executive Vice President and Chief Operating Officer; and Jeremy Wegner, Senior Vice President and Chief Financial Officer. I'm going to turn the session over to Jeff Fisher. Jeff?

Jeffrey Fisher

Okay, thanks, Chris, and good morning, everyone. Certainly appreciate all joining us this morning here. Dennis, Jeremy, and I are coming to you from our Homewood Suites in Paducah, Kentucky, after touring all 6 of our recently acquired hotels over the last couple of days. And let me tell you something, believe it or not, it's pretty exciting to be here. Let's start there.

Year-to-date through September, the approximate $100 million portfolio generated excellent results with third quarter RevPAR growth of 10% and GOP margins of 45.4%. Year-to-date through September, RevPAR rose 8% and GOP margins expanded 140 basis points to 48%. Both metrics outperformed our portfolio in the quarter and year-to-date, which is just fantastic.

Demand growth has been approximately 3% in 2026, and that number accelerated in the third quarter to almost 5%. As we enter the seasonally slower months, we look ahead to another good year next year and the full ramp-up of events at the new and recently expanded athletic complexes in Paducah.

Pivoting to our overall results, it was another great quarter, stacked on top of an equally strong second quarter and a very good first quarter, with excellent results on the top line, margins, and flow-through to Hotel EBITDA and FFO per share. Listen to these third quarter results: RevPAR up 8%, Hotel EBITDA margins up 190 basis points, and EBITDA up 21%, with our FFO per share up 31%. We certainly haven't seen that for a while. Combining outstanding operating results with a very accretive acquisition, while strategically hitting a home run with our share repurchase plan, are each meaningful contributors that have enabled us to easily beat our original expectations for the year.

We've increased our original FFO per share guidance from $1.09 to $1.39 at the midpoint, a 28% increase. Third quarter RevPAR of $161 set an all-time high off the back of record July and September RevPAR. Business travel represents approximately 75% of our EBITDA, and BT demand was the biggest driver of our results. All of the major airlines are seeing the same thing as American. American said corporate travel is up 28%, with small and medium business performance up 46%. Delta reported its highest corporate sales week ever during the third quarter and corporate sales across all sectors up double digits. United said business revenue was up 22% in the quarter.

And Southwest said the third quarter included 20 of the top 50 corporate booking days in history. Obviously, all this is very encouraging for the hotel industry overall, but especially for us, given BT is, as I said, by far our most important segment. Also, we are continuing to see announcement after announcement of business investment happening around the country, and it is driving BT demand up and down the chain scales. We've seen broad strength across our portfolio as evidenced by our overall portfolio occupancy of 83% in the quarter, which marks our highest quarterly occupancy since 2019. Additionally, 13 of our 39 hotels produced double-digit RevPAR growth in the quarter.

Of course, for us, for years we were asked by investors and potential investors when Silicon Valley was going to come back to life. And we can affirmatively say it is. RevPAR surged 23% to $174, which is the highest quarterly RevPAR since the pandemic, excluding the intern-heavy third quarter of 2022.

RevPAR has been up double digits 5 of the last 6 years, and projected 2026 RevPAR growth should be our best growth since the pandemic. This is obviously a great statistic. Third quarter occupancy reached 85% for the hotels, which represents the 4th highest quarterly occupancy in the last decade. As we've previously spoken, once occupancy starts getting above 80%, it allows us to start pushing ADR more aggressively. Depending on how the fourth quarter finishes, we may very well achieve a 10% ADR increase this year, which would be a great way to head into 2027 for those hotels. We are experiencing strong corporate demand in the Valley. All 4 hotels have seen top account production increases ranging from 22% to 29% at our Mountain View and both Sunnyvale hotels, and over 50% increases at our San Mateo hotel.

If you look at our growth in the second and third quarters, our hotels actually did better outside of the World Cup games. Our top accounts are filled with names everyone knows, whether it be Applied Materials, Palo Alto Networks, NVIDIA, Alphabet, Amazon, Microsoft, SAP, Sony, Roblox, Samsung, or Tesla, just to name a few. By the way, Silicon Valley's strength continued in October with RevPAR growth of approximately 18% and occupancy of almost 80%. As we've reiterated, a key component of the Chatham growth story moving forward is the accelerating recovery of these 4 hotels that will drive outperformance.

Silicon Valley added 250 basis points to our third quarter RevPAR growth. Outside of the Valley, among our largest markets, Dallas and Washington, D.C. were the best performers, with RevPAR growth of 20% and 15%, respectively. As everyone knows, the Dallas Convention Center has been substantially closed for renovation and expansion since 2024, but it still hosts some smaller events, and our performance benefited from some World Cup demand related to the entire media center for the first part of July and a great job by our team selling the hotel with RevPAR up 34% in the quarter. That was the media center for the World Cup.

Of course, performance at our 3 D.C. hotels thankfully benefited from no shutdowns or threats of shutdowns, encouragingly, and this applies to all our hotels. Government per diem rates for the next year, 2026 to 2027 period, are up on an average over 5% across our portfolio. So that's some good news looking forward.

Year-to-date RevPAR at our 2 Sunnyvale hotels is approximately 18% below 2019 levels still. Mountain View was under renovation this year, so it's not comparable, but it's trending around the same level. Relative to 2019, San Mateo is up approximately 8% versus 2019. Returning RevPAR to 2019 levels at the 2 big Sunnyvale hotels would add another $4 million to $5 million of FFO, or an additional $0.08 to $0.10 per share.

Before handing the call over to Dennis, I want to emphasize that we are thrilled with our results so far this year. What I said earlier is a combination of great results along with great strategic decisions over the past few years, and thankfully shareholders have noticed, and our returns lead all lodging REITs in 2026. Having said that, we strongly believe in our ability to further increase shareholder value via multiple levers. As a reminder, the overall lack of new supply in the industry favors existing owners, and combine that with the robust demand growth we are seeing across the board in many of our markets certainly bodes well for 2027 and beyond, and our portfolio will continue to benefit from the continued resurgence of the business traveler, and of course, no other lodging company has the internal growth upside that Chatham does, given our exposure to Silicon Valley and Bellevue.

Now, add in the fact that we generate the highest operating margins in the industry, that means our FFO growth potential is very strong, and that's before investing money on any external acquisitions. Finally, we are generating strong cash flow after CapEx and dividends that we can use to accrete FFO, whether that's by paying down debt, making acquisitions, repurchasing shares, or increasing our common dividend.

Our balance sheet is in great shape after our successful recycling of assets and paying down debt over the last couple of years. So based on our guidance, we estimate that we will generate $25 million of free cash flow. And let's not forget our Portland Home2 Suites will deliver accretive earnings upon its opening in 2028. We look forward to executing on these many levers that we do have and delivering for our shareholders going forward. With that, I'd like to turn it over to Dennis.

Dennis Craven

Thanks, Jeff. We continue to experience broad demand growth across our portfolio with approximately 85% of our hotels generating RevPAR growth and 80% of our hotels pushing ADRs higher. And as Jeff stated, 1/3 of our hotels experienced double-digit RevPAR gains. Trends are even better than the strong trends we saw in both of the first 2 quarters.

Our top 5 RevPAR hotels in the quarter were led by our Hampton Inn Portland with RevPAR of $350, essentially flat to last year, an incredible $120 higher than our second highest hotel, the Hilton Garden Inn Portsmouth, with RevPAR of $230. Rounding out our top 5 were the Hilton Garden Inn Marina del Rey with a RevPAR of $225, our Residence Inn in White Plains, New York, with a RevPAR of $206, and then the Residence Inn Mountain View, producing great results following its renovation.

We had little exposure to the World Cup in the third quarter, benefiting only slightly from 1 game at Levi's Stadium and 1 at SoFi Stadium, as well as the media center in Dallas that Jeff spoke about. Our 7 predominant leisure hotels generated RevPAR growth of approximately 1% in the quarter. Our leisure hotels were led by our Hyatt Place Pittsburgh / North Shore, which saw RevPAR grow 17%. On the downside, our Savannah SpringHill Suites cooled off slightly, down 4% in the quarter, with that mark softening after being really on fire for the last several years. Our Hilton Garden Inn Portsmouth saw RevPAR decline 6% in the quarter, due to leisure demand softness from Canada and a new Homewood Suites that opened earlier this year just down the block.

Our 5 convention hotels saw RevPAR expand 15% in the quarter. Dallas and Austin had rebound quarters with RevPAR up 34% and 20%, respectively, gaining business even though their respective convention centers are essentially closed. Austin also benefited from increased business travel from key corporate accounts in The Domain, where both of our hotels are located. Another nice development occurred in San Antonio with our hotel up there 21% in the quarter. Outside of our larger markets, we had another great quarter at our 2 hotels outside of Charleston in Summerville, where RevPAR grew 10%, and our Home2 Suites Phoenix Downtown experienced RevPAR gains of 13% in the quarter.

Switching to our bottom-line successes, we had another great quarter managing expenses and maximizing employee productivity as well as increasing our out-of-room profits, which ultimately are driving our margins higher. We continue to focus on increasing other operating department revenue and profits, and we were able to increase those profits by about $700,000 or 23% in the quarter from $3.2 million to $3.9 million. Within our other operating departments, we increased parking profit by $260,000 or 12% and doubled our cancellation fees to almost $500,000 due to increased focus on collecting and also benefiting from the PMS implementations which automated cancellation fee collections. We even increased our pantry profits by 10% in the quarter. Just a fantastic job by our teams focusing on these profit enhancement initiatives.

Our employee productivity remains excellent. We maintained a steady level of employment versus the end of the second quarter. It was actually down 4 employees, and that's a nice achievement, even though portfolio occupancy rose to 83% from 81% from the second quarter to the third quarter. For the quarter, our labor and benefits cost per occupied room increased 2.9%, thus allowing us to meaningfully expand our operating margins.

Outside of labor and benefits, we were able to drive margins higher by reducing our repairs and maintenance, our utilities, our property taxes, and our property insurance line items all by approximately 30 basis points each. Again, should be some good news coming on the property insurance renewal upcoming for 2027 with expectations of a further reduction of 8% to 10% expected at this point. For us, it's not big dollars, and it's probably only a decrease of probably around a few hundred thousand dollars, but nonetheless great to see and will help offset what seems to be never-ending increases in healthcare costs and employee-related liability insurance.

For the quarter, our top 5 producers of GOP were led by the little old Hampton Inn Portland, with GOP of $2.4 million, just another fantastic quarter, followed by our Residence Inn San Diego Gaslamp Quarter, and then 3 of our 4 tech hotels or our 5 tech hotels, our Residence Inn Bellevue, our 2 Sunnyvale hotels, rounding out the top 5. And when you include Mountain View and San Mateo, all 4 Silicon Valley hotels were in the top 11 of our 39 hotels. If you look at Hotel EBITDA, really the only difference in the top 5 is that our Embassy Suites Springfield bested our Sunnyvale #1 hotel to reach the top 5.

Looking further at the Silicon Valley hotels, third quarter GOP was up 39% and Hotel EBITDA grew 51% year-over-year on a 23% increase in RevPAR. Our third quarter GOP margins were approximately 50%, up 500 basis points, and our Hotel EBITDA margins of almost 43% rose 740 basis points. We did receive about $100,000 of property tax refunds in the quarter on 1 of our hotels in Sunnyvale, which added about 80 basis points to that margin, but still, excluding that, 660 basis points of Hotel EBITDA margin improvement.

We discussed last quarter that we most likely look to opportunistically sell an asset or 2 this year. We do have 1 hotel currently under contract for approximately $11.5 million that would close before the end of the year if it is completed. On the CapEx front, we spent approximately $3 million in the quarter and $17 million year-to-date, with our full budget for the year being about $27 million. And we do have 3 hotels scheduled for renovation later this year, which are our Gaslamp Residence Inn, Farmington Homewood Suites, and our Hyatt Place Pittsburgh, which will commence its renovation most likely now in early January, given the fact that the Steelers at least look to be making the playoffs at the moment. So I'll turn it over to Jeremy.

Jeremy Wegner

Thanks, Dennis. Good morning, everyone. Our Q3 2026 Hotel EBITDA was $35.7 million, Adjusted EBITDA was $31.9 million, and Adjusted FFO was $0.46 per share. We were able to generate a GOP margin of 44.7% and Hotel EBITDA margin of 38.7% in Q3. GOP margins for the quarter were up 110 basis points from last year, and Hotel EBITDA margins increased 190 basis points.

The Midwest portfolio that we acquired in March generated RevPAR growth of 9.8% and $3 million of Hotel EBITDA in Q3. Chatham's overall RevPAR growth of 8.3% in Q3 exceeded our expectations going into the quarter, and the strong top-line performance has continued into October, where Chatham's RevPAR increased 7.9%. While Chatham's top-line performance was strong across many markets, performance was strongest in Silicon Valley, where RevPAR increased 23% in the quarter. Costs continue to remain manageable, with rooms labor up just under 3% on a cost-per-occupied-room basis in Q3.

Chatham's balance sheet remains in excellent condition and provides significant flexibility to fund opportunistic growth through accretive acquisitions and the development of the Home2 Suites Portland, Maine. As of Q3, Chatham's leverage ratio, as defined in its credit facility, was only 29.3%, and the company had $235 million of availability under its revolving credit facility. Continuing strong EBITDA growth and meaningful free cash flow after dividends are expected to further enhance our financial flexibility. In 2026, we expect to generate approximately $25 million of free cash flow after dividends, and maintenance and renovation capital expenditures. With this level of free cash flow, Chatham will be able to fund the development of the Home2 Suites Portland with virtually no incremental borrowing.

Turning to our full year guidance for 2026, we expect RevPAR growth of 4% to 4.5%, Adjusted EBITDA of $104.2 million to $105.3 million, and Adjusted FFO per share of $1.38 to $1.40 for the full year. We generally expect that Chatham's Q4 RevPAR growth will be approximately 3.5% to 4%.

That concludes my portion of the call. Operator, please open the line for questions.

Operator

[Operator Instructions]

The first question comes from the line of Gaurav Mehta with Alliance Global Partners.

Phần hỏi đáp

Gaurav Mehta

I wanted to ask you on your Silicon Valley hotels, maybe on the occupancy side, what's the upside left on the occupancy side? Is this more like a natural cap on the occupancy? And then how does the occupancy for a Silicon Valley hotel compare to the market occupancy in Silicon Valley?

Dennis Craven

Hey, Gaurav, this is Dennis. I mean, listen, I think if you look at upside, and I don't have the full year quantified for you, but if you go back to pre-pandemic years, you know, the Silicon Valley hotels ran upwards of 80s and into the 90s in terms of occupancy, especially in the second and third quarters. And then seasonally, those hotels slow down from kind of mid-November to mid-February. So there's still a lot of upside in total occupancy levels. I think when you looked at our third quarter occupancy of almost 85%, there's still room to run there.

Gaurav Mehta

My second question is on the expense side. It seems like your expense growth in the quarter was 2.5%. Can you maybe provide some color on how you managed to keep the expenses lower in the quarter?

Dennis Craven

Sure. Yes, I mean, Gaurav, this is something really we've—and I'll give kudos to Island Hospitality. We don't like giving them too many compliments here and there sometimes. But really over the last few years, they've invested a lot of resources and people especially that are really looking at trends and patterns every day of the week and staying in constant communication with the GMs and the regional VPs, just ensuring that they are adjusting their expense patterns, their buying, their labor most importantly in terms of hours on a very frequent basis. Just those controls allow us to really keep a handle on especially employee productivity.

Gaurav Mehta

All right, thank you. That's all I have.

Dennis Craven

Thank you, Gaurav.

Operator

Your next question comes from the line of Tyler Batory with Oppenheimer.

Tyler Batory

I don't want to lose the forest through the trees with this first question, but I am curious a little bit more about what you're seeing the rest of Q4, just in terms of trying to bridge the RevPAR performance so far this year, the RevPAR performance through October in particular, and then November and December, and how those are shaping up as the holiday kind of complicates things and it's seasonally slow, but just wanted to see what you're seeing to end the year.

Dennis Craven

Yes, I mean, I think, Tyler, similar to what we've done each of the first 3 quarters, I think November and December for us, generally speaking, is kind of low-single-digit RevPAR growth implied. We'd like to think that we're going to beat that, and so we're a little bit conservative on that front. We do have, obviously, one of our bigger hotels, the Residence Inn San Diego Gaslamp Quarter, has started its renovation. Thankfully, it's kind of in a year where the convention calendar is a little bit down, so timing is a little helpful to us, but I think in general we're going to be a little conservative here for November and December.

One thing we do know, even though it's always a comp year-over-year, is that obviously the 4 Silicon Valley hotels, which have been just fantastic, people do start to check out there as you get into the Thanksgiving holidays, and a lot of those people just really don't come back until after the first of the year and really into February, late January and early February. So we're just going to be a little bit conservative here, and hopefully we outperform it.

Tyler Batory

Okay, that's what I figured, I just wanted to check. And then a multi-part question thinking about 2027—I know visibility still has a ways to go till we get to 2027, but I imagine you're doing budgets and planning for next year. In terms of the industry and the lodging industry overall, I mean, again, the performance this year has been exceptional. And I just wonder if that has legs into next year, or do we start to run into challenging comps and maybe things start to slow? So if you could talk about just your industry perspective, that would be helpful.

And then specific to Chatham, just straightforward, some of the building blocks, renovations, possible disruption, possible outperformance next year. Really just trying to get a baseline of generally how you're thinking about the industry, and then in light of that outlook, how you're positioned to potentially outperform.

Jeffrey Fisher

You want me to take that industry perspective? Well, that's a lot of questions. This is Jeff. I'm not sure we can remember all that, but we'll try, okay? But, relative to 2027, look, I will tell you, because we try to tell it like it is, that some of the outperformance this year, obviously in the industry, has to be attributed to some of the real crappy results the prior year, and some of those external factors, whether they were a couple of government shutdowns and some of the other things that occurred overall in the macro geopolitical. So you do have a scenario on that front that doesn't repeat itself in 2027.

But that being said, I think the underlying strength that everybody is seeing in the business travel segment, which is where we are, as I've said during the prepared comments and otherwise when you look at the composition of our portfolio, really bodes well for us for next year. And look, they can vote to shut down as many government shutdowns as they want to shut down in the future, but I still believe that Silicon Valley has plenty of legs left in it for the work that is going on and for the overall expansion in that segment. I think that with 1/3 of the portfolio, or hopefully getting back to that number for our total EBITDA, would be very accretive, as we indicated, around 10 cents or more in FFO on top of where we are.

And I think I could turn it back over to Dennis to talk about any specific drivers per se going forward.

Dennis Craven

Yeah, Tyler, I mean, listen, I don't know if you happened to catch, but Chris Nassetta was on CNBC this morning. He spoke, and one of his statistics was talking about non-residential fixed investment—NRFI, not exactly no-runs-first-inning gambling bets, but basically saying that it's at its strongest point in decades. And I think one of the things we've talked about here for a good 1.5 years or so is the fact that just with all this capital investment, whether that was from the prior administration with the Infrastructure Act and now what's happened in the last 2 years, there is just a lot of money being spent on manufacturing and other types of things as well around the country.

And as we sit here in Paducah, Kentucky, after going to Effingham yesterday and Joplin, all 6 of our hotels basically had the same thing, which is Monday to Thursday, they're 100% sold out at this stage of that thing. So there's just a lot of activity happening in a lot of these investment areas that are very encouraging, especially for Chatham, given its reliance on, obviously, our tech hub in Silicon Valley, but also just in general our exposure around kind of the Midwest and the Southeast, where a lot of this capital investment is happening. So I think in general that is really where it is, and that's going to be very good for our hotels.

Jeffrey Fisher

And look, with 66% of the hotels being extended-stay hotels, let me not forget the benefit that brings because you could see that kind of business that Dennis is talking about, and a lot of the locations really is more than 1-night, 2-night business. So the length of stay, I think, is important. Those statistics, I think, over as you move through the next couple of years, and I noticed that extended-stay hotels, again, outpaced non-extended-stay hotels on a recent report by Highland, very substantially, and that gap should continue to grow, in my opinion.

It bodes well for all our Homewoods, Residence Inns, our Home2s, those kind of hotels.

Dennis Craven

And lastly, Tyler, you did mention kind of renovation schedules and everything like that as you move into 2027 and in the years after that. We are pretty well lined up here to where it is essentially going to be around 5 hotels per year that will be getting renovated over the next several years. We have the big San Diego Gaslamp Quarter Hotel starting—well, now it's commenced that renovation. If you look forward a year, fourth quarter of next year, kind of from the November to February timeframe, we'll be renovating 1 of our Sunnyvale hotels. The following year after that, we'll be renovating the second of the Sunnyvale hotels, and after that the San Mateo Hotel.

Those are pretty well lined up, at least from a comp perspective, Tyler, that we're not going to be taking multiple of our biggest hotels out at the same time. So it really should have a normalized effect when you look at our comp RevPAR.

Jeffrey Fisher

But just to footnote that, I think you get a lot of ADR growth out of those renovations, particularly in Silicon Valley.

Dennis Craven

Yes, and we haven't spent a lot of time talking about it, but we will in the near future, which is a lot of the improvements we're going to be making to all 4 of those hotels outside of the guest rooms. And that's really exciting in terms of adding some stuff to the hotels and really nice fitness facilities and other facilities, and really enhancing the outdoor spaces and public space of those gatehouses, really to bring those up to experiences that today's traveler is really going to like. So we're excited about that.

Jeffrey Fisher

Okay, we're not getting senile yet anyway. That's good news.

Tyler Batory

A lot of good detail there, so I appreciate it, and I think you hit on all my questions. So I'll leave it there. Thank you.

Jeffrey Fisher

All right. Okay.

Operator

[Operator Instructions]

Ladies and gentlemen, since there are no further questions, I would like to hand the call back over to you for closing remarks. Please go ahead.

Jeffrey Fisher

Well, thank you all for joining today, for those of you that are there or listen later on. And we certainly look forward to maintaining our momentum, our focus, and I think the results will speak for themselves going forward. Thank you.

Operator

Thank you, everyone, and that concludes today's call. You may now all disconnect. Have a nice day ahead. Thank you.

This live transcript is auto-generated without human intervention or review.