Jeffrey Fisher, chairman, president and CEO of Chatham Lodging Trust (NYSE: CLDT), joined REIT.com for a CEO Spotlight video interview during REITWeek 2015: NAREIT’s Investor Forum, held in New York.
Chatham invests primarily in extended-stay select service and full service hotels in the 25 largest metropolitan markets in the United States.
Fisher discussed Chatham’s pricing power with regard to room rates.
“We’re in the part of the hotel cycle that we characterize as mid-cycle, where we are able to get very good average daily rate (ADR) increases,” Fisher said. He noted that this is the primary driver for revenue per available room (RevPAR) in 2015 and 2016.
Fisher explained that the location of its hotels and their amenities are of particular appeal to the corporate business traveler, who is willing to pay more. “Our ADR and RevPAR increase have been strong and I expect that to be the case going forward,” Fisher said.
In order to enhance the guest experience, Chatham has been actively upgrading its portfolio, according to Fisher. Most of the work has now been completed, he said, and what remains now is “normal cycle renovations” such as replacing room furnishings.
Turning to potential challenges that Chatham might face, Fisher noted that the primary concern for the lodging sector is new supply and its impact on occupancy rates. Fisher said he has no concerns at this time concerning supply. “That’s why we buy hotels in places that are really hard to build in in the first place. That really insulates our hotels, for the most part, from those issues,” he said.