Chatham Lodging Trust (CLDT) risk factors, FY2024 10-K

Chatham Lodging Trust's FY2024 10-K, filed Feb 26, 2025, lists 63 risk factors in 3 groups. There is no earlier 10-K to compare against, so the most company-specific risks are listed below.

Risk factors listed
633 groups
Section length
15k wordsItem 1A

Chatham Lodging Trust's biggest risks in the FY2024 10-K

  • Chatham Lodging Trust faces heavy concentration risks tied to its external manager IHM and franchisors.
  • Lodging cyclicality, debt financing costs, and capital expenditure needs dominate risks.

The risks most specific to Chatham Lodging Trust

  • Risks Related to Our Business

    The management of the hotels in our portfolio is currently concentrated in one hotel management company

    As of December 31, 2024, IHM managed all 37 of our hotels, creating significant operational concentration risk.

  • Risks Related to Our Business

    There may be conflicts of interest between us and affiliates owned by our Chief Executive Officer

    Our Chief Executive Officer, Mr. Fisher, owns 100% of IHM, which manages all of our hotels, creating potential conflicts of interest.

  • Risks Related to Our Business

    Our franchisors could cause us to expend additional funds on upgraded operating standards, which may reduce cash available for distribution to shareholders

    Our hotels operate under franchise agreements that require adherence to operating standards, potentially forcing additional capital expenditures.

  • Risks Related to Our Business

    We must rely on third party management companies to operate our hotels in order to qualify as a REIT under the Code and, as a result, we have less control than if we were operating the hotels directly

    We must lease our hotels to TRS Lessees and use third-party managers like IHM to maintain our REIT qualification.

  • Risks Related to Our Business

    Future debt service obligations could adversely affect our overall operating results or cash flow and may require us to liquidate our properties, which could adversely affect our ability to make distributions to our shareholders and our share price

    Future debt service obligations may require us to liquidate properties or impact our share price and shareholder distributions.

  • Risks Related to the Lodging Industry

    The increasing use by consumers of Internet travel intermediaries and alternative lodging market places may adversely affect our profitability

    The increasing use of Internet travel intermediaries and alternative lodging marketplaces could lead to higher commissions and reduced room rates.

  • Risks Related to the Lodging Industry

    The need for business-related travel and, thus, demand for rooms in our hotels may be materially and adversely affected by the increased use of business-related technology

    Increased use of teleconference and video-conference technology by businesses could reduce demand for rooms in our hotels.

All 63 risk factors

Headings as the filing states them, in filing order.

Risks Related to the Lodging Industry

  1. 01Competition for guests may lower our hotels' revenues and profitability
  2. 02General Risks Related to the Real Estate Industry
  3. 22The lodging industry has experienced significant declines in the past and failure of the lodging industry to exhibit improvement may adversely affect our ability to execute our business strategy
  4. 23Our ability to make distributions to our shareholders may be affected by various operating risks common in the lodging industry
  5. 24Competition for acquisitions may reduce the number of properties we can acquire
  6. 25The cyclical nature of the lodging industry may cause the return on our investments to be substantially less than we expect
  7. 26The ongoing need for capital expenditures at our hotel properties may adversely affect our business, financial condition and results of operations and limit our ability to make distributions to our shareholders
  8. 27The increasing use by consumers of Internet travel intermediaries and alternative lodging market places may adversely affect our profitability
  9. 28The need for business-related travel and, thus, demand for rooms in our hotels may be materially and adversely affected by the increased use of business-related technology
  10. 29We and our hotel managers rely on information technology in our operations, and any material failure, inadequacy, interruption or security failure of that technology could harm our business
  11. 30Future terrorist attacks or changes in terror alert levels could adversely affect travel and hotel demand
  12. 31We may assume liabilities in connection with the acquisition of hotel properties, including unknown liabilities, which, if significant, could adversely affect our business
  13. 32Uninsured and underinsured losses could adversely affect our operating results and our ability to make distributions to our shareholders
  14. 33In the event of a substantial loss, insurance coverage may not be sufficient to cover the full current market value or
  15. 34Noncompliance with environmental laws and governmental regulations could adversely affect our operating results and our ability to make distributions to shareholders
  16. 35Compliance with the ADA and other changes in governmental rules and regulations could substantially increase our cost of doing business
  17. 36The outbreak of widespread contagious disease, such as COVID-19, could reduce travel and adversely affect hotel demand
  18. 37Illiquidity of real estate investments could significantly impede our ability to respond to adverse changes in the performance of our hotel properties
  19. 38If financing for hotel properties is not available or is not available on attractive terms, it will adversely impact the ability of third parties to buy our hotels. As a result, we may hold hotel properties for a longer period than we would otherwise desire and may sell hotels at a loss
  20. 39Increases in our property taxes would adversely affect our ability to make distributions to our shareholders
  21. 40Our hotel properties may contain or develop harmful mold, which could lead to liability for adverse health effects and costs of remediating the problem

Risks Related to Our Business

  1. 03The COVID-19 pandemic has had, and may continue to have, or a future pandemic could have, adverse effects on our financial condition, results of operations, cash flows and performance
  2. 04Our investment policies are subject to revision from time to time at our Board of Trustees' discretion, which could diminish shareholder returns below expectations
  3. 05We depend on the efforts and expertise of our key executive officers whose continued service is not guaranteed
  4. 06Our future growth depends on obtaining new financing and if we cannot secure financing in the future, our growth will be limited
  5. 07We must rely on third party management companies to operate our hotels in order to qualify as a REIT under the Code and, as a result, we have less control than if we were operating the hotels directly
  6. 08The management of the hotels in our portfolio is currently concentrated in one hotel management company
  7. 09Our franchisors could cause us to expend additional funds on upgraded operating standards, which may reduce cash available for distribution to shareholders
  8. 10Our franchisors may cancel or fail to renew our existing franchise licenses, which could adversely affect our operating results and our ability to make distributions to shareholders
  9. 11Fluctuations in our financial performance, capital expenditure requirements and excess cash flow could adversely affect our ability to make distributions to our shareholders
  10. 12Future debt service obligations could adversely affect our overall operating results or cash flow and may require us to liquidate our properties, which could adversely affect our ability to make distributions to our shareholders and our share price
  11. 13If we are unable to repay our debt obligations in the future, we may be forced to refinance debt or dispose of or encumber our assets, which could adversely affect distributions to shareholders
  12. 14Interest expense on our debt may limit our cash available to fund our growth strategies and shareholder distributions
  13. 15Failure to hedge effectively against interest rate changes may adversely affect our results of operations and our ability to make shareholder distributions
  14. 16Joint venture investments that we may make could be adversely affected by our lack of decision-making authority, our reliance on joint venture partners' financial condition and disputes between us and our joint-venture partners
  15. 17We may from time to time make distributions to our shareholders in the form of our common shares, which could result in shareholders incurring tax liability without receiving sufficient cash to pay such tax
  16. 18Our conflict of interest policy may not be successful in eliminating the influence of future conflicts of interest that may arise between us and our trustees, officers and employees
  17. 19There may be conflicts of interest between us and affiliates owned by our Chief Executive Officer
  18. 20Hotel development is subject to timing, cost, and other risks
  19. 21Inflation and price volatility in the global economy could negatively impact our business and results of operations

Risks Related to Our Organization and Structure

  1. 41Our rights and the rights of our shareholders to take action against our trustees and officers are limited, which could limit your recourse in the event of actions not in your best interests
  2. 42Provisions of Maryland law may limit the ability of a third party to acquire control of our Company and may result in entrenchment of management and diminish the value of our common shares
  3. 43Provisions of our declaration of trust may limit the ability of a third party to acquire control of our Company and may result in entrenchment of management and diminish the value of our common shares
  4. 44Failure to make required distributions would subject us to tax
  5. 45Failure to maintain our qualification as a REIT would subject us to federal income tax and potentially to state and local taxes
  6. 46Our TRS Lessee structure subjects us to the risk of increased hotel operating expenses that could adversely affect our operating results and our ability to make distributions to our shareholders
  7. 47Our TRS structure increases our overall tax liability
  8. 48Our transactions with our TRS will cause us to be subject to a 100% penalty tax on certain income or deductions if those transactions are not conducted on arm's-length terms
  9. 49If our leases with our TRS Lessees are not respected as true leases for federal income tax purposes, we would fail to qualify as a REIT
  10. 50Dividends payable by REITs do not qualify for the reduced tax rates available for some dividends
  11. 51If our hotel managers do not qualify as "eligible independent contractors," we would fail to qualify as a REIT
  12. 52Our ownership limitations may restrict or prevent you from engaging in certain transfers of our common shares
  13. 53The ability of our Board of Trustees to revoke our REIT qualification without shareholder approval may cause adverse consequences to our shareholders
  14. 54The ability of our Board of Trustees to change our major policies may not be in our shareholders’ interest
  15. 55If we fail to maintain an effective system of internal controls, we may not be able to accurately determine our financial results or prevent fraud. As a result, our investors could lose confidence in our reported financial information, which could harm our business and the value of our shares
  16. 56Complying with REIT requirements may cause us to forego otherwise attractive opportunities or liquidate otherwise attractive investments
  17. 57We may be subject to adverse legislative or regulatory tax changes that could reduce the market price of our shares
  18. 58We may be unable to generate sufficient cash flows from our operations to make distributions to our shareholders at any time in the future
  19. 59As a result, no assurance can be given that we will be able to make distributions to our shareholders or that the level of
  20. 60Our revolving credit facility and term loan may limit our ability to pay dividends on common shares
  21. 61The market price of our equity securities may vary substantially, which may limit your ability to liquidate your investment
  22. 62The number of shares available for future sale could adversely affect the market price of our common shares
  23. 63Future offerings of debt or equity securities or incurrence of debt may adversely affect the market price of our common shares

Other Chatham Lodging Trust 10-Ks

  • FY2025 10-K risk factors
    71 risks11 new3 dropped14 reworded

    Chatham Lodging Trust added risks concerning artificial intelligence adoption, federal government shutdowns affecting travel, and debt covenants constraining distributions.

    Filed Feb 27, 2026

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.