Hotel REITs are beginning to announce third quarter earning results. While many REITs are reporting some improvement compared to earlier in the pandemic, the results are varied. While there is yet to be a clear picture of the hotel market, hotels are beginning to show signs of recovery with positive EBITDA and improving RevPAR.

Chatham Lodging Trust, which focuses on select-service hotels, has outperformed the greater hotel market. In the third quarter, EBITDA turned positive and occupancy rebounded into the 50% range. RevPAR and ADR also showed improvement. The REIT also reports liquidity of $109 million including cash of $32 million and remaining capacity of $77 million on the credit facility. This gives Chatham 64 months of liquidity, excluding capex. While the third quarter showed improvement, October has already reversed direction with lower occupancy compared to September, which could be related to the rise in COVID cases in the US.

Pebblebrook Hotel Trust was another bright spot for REIT performance. A report from BTIG found that the REIT is better positioned than its peers to withstanding the recession thanks to a portfolio with exposure to the drive-to resort segment, smaller hotels with fewer fixed costs and only a small exposure to the higher costs of owning large, group-oriented branded hotels. In the third quarter, the REIT's EBITDA was $27.6 million, which were slightly weaker than estimates, while occupancy was 19.5%, ADR was $215.95 and RevPAR was $42.17.