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What changed in RLJ Lodging Trust's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of RLJ Lodging Trust's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+198 added−170 removedSource: 10-K (2026-02-27) vs 10-K (2025-02-26)

Top changes in RLJ Lodging Trust's 2025 10-K

198 paragraphs added · 170 removed · 153 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeThe following table sets forth the brand affiliations of our hotel properties as of December 31, 2024: Brand Affiliations Number of hotels Percentage of total hotels Number of rooms Percentage of total rooms Marriott Courtyard 13 13.5 % 2,917 13.7 % Residence Inn 9 9.4 % 1,366 6.4 % Marriott 4 4.2 % 1,500 7.0 % Fairfield Inn & Suites 3 3.1 % 418 2.0 % Renaissance 3 3.1 % 782 3.7 % SpringHill Suites 2 2.1 % 273 1.3 % AC Hotel 1 1.0 % 205 1.0 % Moxy 1 1.0 % 170 0.8 % Tribute Portfolio 1 1.0 % 132 0.6 % Subtotal 37 38.4 % 7,763 36.5 % Hilton Embassy Suites 19 19.8 % 5,289 24.8 % Hilton Garden Inn 5 5.2 % 1,125 5.3 % DoubleTree/DoubleTree Suites by Hilton 4 4.2 % 937 4.4 % Hampton Inn/Hampton Inn & Suites 3 3.1 % 499 2.3 % Curio Collection 2 2.1 % 468 2.2 % Homewood Suites 2 2.1 % 345 1.6 % Hilton 1 1.0 % 231 1.1 % Tapestry Collection 1 1.0 % 124 0.6 % Subtotal 37 38.5 % 9,018 42.3 % Hyatt Hyatt House 7 7.3 % 1,204 5.6 % Hyatt Place 3 3.1 % 466 2.2 % Hyatt Centric 2 2.1 % 266 1.2 % Subtotal 12 12.5 % 1,936 9.0 % Wyndham Wyndham 4 4.2 % 1,642 7.7 % Subtotal 4 4.2 % 1,642 7.7 % Other Brand Affiliation/Independent 6 6.4 % 968 4.5 % Total 96 100.0 % 21,327 100.0 % Asset Management We have a dedicated team of asset management professionals that proactively work with our independent managers to maximize profitability at each of our hotels to the extent permitted under the REIT rules.
Biggest changeThe following table sets forth the brand affiliations of our hotel properties as of December 31, 2025: Brand Affiliations Number of hotels Percentage of total hotels Number of rooms Percentage of total rooms Marriott Courtyard 12 12.9 % 2,736 13.2 % Residence Inn 8 8.6 % 1,220 5.9 % Marriott 4 4.3 % 1,500 7.2 % Fairfield Inn & Suites 3 3.2 % 418 2.0 % Renaissance 3 3.2 % 782 3.8 % SpringHill Suites 2 2.2 % 273 1.3 % AC Hotel 1 1.1 % 205 1.0 % Moxy 1 1.1 % 170 0.8 % Tribute Portfolio 1 1.1 % 132 0.6 % Subtotal 35 37.7 % 7,436 35.8 % Hilton Embassy Suites 18 19.4 % 5,041 24.3 % Hilton Garden Inn 5 5.3 % 1,125 5.4 % DoubleTree/DoubleTree Suites by Hilton 4 4.3 % 944 4.5 % Hampton Inn/Hampton Inn & Suites 3 3.2 % 499 2.4 % Curio Collection 2 2.2 % 468 2.3 % Homewood Suites 2 2.2 % 345 1.7 % Hilton 1 1.1 % 231 1.1 % Tapestry Collection 1 1.1 % 124 0.6 % Subtotal 36 38.8 % 8,777 42.3 % Hyatt Hyatt House 7 7.4 % 1,204 5.8 % Hyatt Place 3 3.2 % 466 2.2 % Hyatt Centric 2 2.2 % 266 1.3 % Subtotal 12 12.8 % 1,936 9.3 % Wyndham Wyndham 4 4.3 % 1,642 7.9 % Subtotal 4 4.3 % 1,642 7.9 % Other Brand Affiliation/Independent 6 6.4 % 968 4.7 % Total 93 100.0 % 20,759 100.0 % Asset Management We have a dedicated team of asset management professionals that proactively work with our independent managers to maximize profitability at each of our hotels to the extent permitted under the REIT rules.
We are the sole general partner of the Operating Partnership and, as of December 31, 2024, we owned 99.5% of the OP units in the Operating Partnership. In the future, we may issue OP units from time to time in connection with acquiring hotel properties, financing, compensation or other reasons.
We are the sole general partner of the Operating Partnership and, as of December 31, 2025, we owned 99.5% of the OP units in the Operating Partnership. In the future, we may issue OP units from time to time in connection with acquiring hotel properties, financing, compensation or other reasons.
Certain of our properties in our portfolio are located in areas known to be subject to hurricanes and we believe that we have appropriate insurance for those risks, although they are subject to higher deductibles for 8 Table of Contents named windstorms than our other properties.
Certain of our properties in our portfolio are located in areas known to be subject to hurricanes and we believe that we have appropriate insurance for those risks, although they are subject to higher retentions for 8 Table of Contents named windstorms than our other properties.
Our hotel properties are indirectly owned by the Operating Partnership, through limited partnerships, limited liability companies or subsidiary REITs (“hotel owners”). The hotel owners lease the hotels to our TRSs, which engage independent managers to operate our hotel properties on market terms.
Our hotel properties are indirectly owned by the Operating Partnership through limited partnerships or limited liability companies (“hotel owners”). The hotel owners lease the hotels to our TRSs, which engage independent managers to operate our hotel properties on market terms.
We consolidate our real estate interests in the 95 hotel properties in which we hold a controlling financial interest, and we record the real estate interest in the one hotel property in which we hold an indirect 50% non-controlling interest using the equity method of accounting.
We consolidate our real estate interests in the 92 hotel properties in which we hold a controlling financial interest, and we record the real estate interest in the one hotel property in which we hold an indirect 50% non-controlling interest using the equity method of accounting.
We are the sole general partner of the Operating Partnership. As of December 31, 2024, we owned, through a combination of direct and indirect interests, 99.5% of the units of limited partnership interest in the Operating Partnership ("OP units").
We are the sole general partner of the Operating Partnership. As of December 31, 2025, we owned, through a combination of direct and indirect interests, 99.5% of the units of limited partnership interest in the Operating Partnership ("OP units").
We lease 95 of the 96 hotel properties to our TRSs, of which we own a controlling financial interest. We elect to be taxed as a real estate investment trust for U.S. federal income tax purposes (a "REIT"). Substantially all of our assets and liabilities are held by, and all of our operations are conducted through, the Operating Partnership.
We lease 92 of the 93 hotel properties to our TRSs, of which we own a controlling financial interest. We elect to be taxed as a real estate investment trust for U.S. federal income tax purposes (a "REIT"). Substantially all of our assets and liabilities are held by, and all of our operations are conducted through, the Operating Partnership.
The independent managers operate the hotels, collect hotel operating revenue, pay operating expenses (including the independent managers’ management fees) on behalf of the TRS pursuant to the relevant hotel management agreement.
The independent managers operate the hotels, collect hotel operating revenue, pay operating expenses (including the independent managers’ management fees) on behalf of the TRSs pursuant to the relevant hotel management agreement.
We do not carry insurance for generally uninsurable risks, including, but not limited to losses caused by communicable or infectious diseases, war or governmental actions such as government seizures of property. In addition, we do not carry cyber insurance. Human Capital As of December 31, 2024, we had 73 employees.
We do not carry insurance for generally uninsurable risks, including, but not limited to losses caused by communicable or infectious diseases, war or governmental actions such as government seizures of property. In addition, we do not carry cyber insurance. Human Capital As of December 31, 2025, we had 75 employees.
We structure our debt profile to maintain financial flexibility and a balanced maturity schedule with access to different forms of financing. 5 Table of Contents Our Hotels Our hotel properties operate under strong, premium brands, with approximately 89.4% of our hotel properties operating under existing relationships with Marriott, Hilton or Hyatt.
We structure our debt profile to maintain financial flexibility and a balanced maturity schedule with access to different forms of financing. 5 Table of Contents Our Hotels Our hotel properties operate under industry-leading, premium brands, with approximately 89.3% of our hotel properties operating under existing relationships with Marriott, Hilton or Hyatt.
Through these and our wider initiatives and support from our hotel operators, across our portfolio since 2019, we were able to reduce our energy usage per square foot by 11% and our greenhouse gas emissions per square foot by 22% as of 2023, bringing us closer to achieving our stated goal of reducing carbon emissions by 35% by 2030.
Through these and our wider initiatives and support from our hotel operators, across our portfolio since 2019, we were able to reduce our energy usage per square foot by 9% and our greenhouse gas emissions per square foot by 23% as of 2024, bringing us closer to achieving our stated goal of reducing carbon emissions by 35% by 2030.
As of December 31, 2024, we owned 96 hotel properties with approximately 21,300 rooms, located in 23 states and the District of Columbia. We owned, through wholly-owned subsidiaries, a 100% interest in 94 of our hotel properties, a 95% controlling interest in one hotel property, and a 50% non-controlling interest in an entity owning one hotel property.
As of December 31, 2025, we owned 93 hotel properties with approximately 20,800 rooms, located in 23 states and the District of Columbia. We owned, through wholly-owned subsidiaries, a 100% interest in 91 of our hotel properties, a 95% controlling interest in one hotel property, and a 50% non-controlling interest in an entity owning one hotel property.
Our capital expenditure priorities are focused heavily on projects that, in addition to strengthening our market positioning, also enhance profitability by bringing about energy and water usage reductions and savings. Since 2021, we have invested in over 300 efficiency projects.
Our capital expenditure priorities are focused heavily on projects that, in addition to strengthening our market positioning, also enhance profitability by bringing about energy and water usage reductions and savings.
We are also committed to supporting our independent managers with integrating the 5-Star Promise principles throughout their hotel operations. Our labor and human rights policy outlines our approach to ensuring fair and equitable labor practices.
We are also committed to supporting our independent managers with integrating the 5-Star Promise principles throughout their hotel operations.
In April 2024, we released our second annual Corporate Sustainability Report, which included the Global Reporting Initiative (“GRI”) disclosures for our portfolio, the Sustainable Accounting Standards Board (“SASB”) Real Estate disclosures and disclosures in accordance with the Task Force on Climate-Related Financial Disclosures (“TCFD”). Going forward, we also expanded our sustainability frameworks to include GRESB participation.
In June 2025, we released our third annual Corporate Sustainability Report, which included the Global Reporting Initiative disclosures for our portfolio, the Sustainable Accounting Standards Board Real Estate disclosures and disclosures in accordance with the Task Force on Climate-Related Financial Disclosures.
We have an internal sustainability committee that reports sustainability matters directly through our CEO to the board’s NCG Committee and meets several times a year. The NCG Committee, with critical support from management, is leading the effort to formulate our strategy with respect to adapting and responding to the risks and opportunities presented by sustainability-related matters.
The NCG Committee, with critical support from management, is leading the effort to formulate our strategy with respect to adapting and responding to the risks and opportunities presented by sustainability-related matters.
We continue to uphold high standards with respect to governance, which is reflected in our approach to maintaining a highly diverse board and our overall approach to risk management. With respect to our board, three trustees are women, five 9 Table of Contents are ethnically diverse and seven are independent.
Our labor and human rights policy outlines our approach to ensuring fair and equitable labor practices. 9 Table of Contents We continue to uphold high standards with respect to governance, which is reflected in our approach to maintaining a highly diverse board and our overall approach to risk management.
We maintain our partnership with a number of other locally-based charitable organizations including the N Street Village, Bridges from School to Work, and Don Bosco Cristo Rey. Additionally, we continue to support small businesses in our community through a $5.0 million deposit at Industrial Bank, a minority-owned financial institution which aims to empower under-banked businesses and individuals locally.
Additionally, we continue to support small businesses in our community through a $5.0 million deposit at Industrial Bank, a minority-owned financial institution which aims to empower under-banked businesses and individuals locally.
Nearly 80% of our board has deep expertise and experience in risk management. In addition, our board, via the Nominating and Corporate Governance Committee (the "NCG Committee") of the board, has the overall responsibility for overseeing sustainability-related issues, policies and programs for our company.
In addition, our board, via the Nominating and Corporate Governance Committee (the "NCG Committee") of the board, has the overall responsibility for overseeing sustainability-related issues, policies and programs for our company. We have an internal sustainability committee that reports sustainability matters directly through our CEO to the board’s NCG Committee and meets several times a year.
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With respect to social causes, we continue to show our commitment to making an impact in the communities we serve. In 2024, we continued our support for Habitat for Humanity’s Maryland chapter, sponsoring two volunteer days. Company associates helped to build housing at Habitat for Humanity’s Maryland locations.
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We also continued our participation in sustainability frameworks such as GRESB and meaningfully improved our overall score over the prior year.
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With respect to social causes, we continue to show our commitment to making an impact in the communities we serve. In 2025, RLJ employees participated in a number of company-sponsored volunteer opportunities, including a finance mentorship program with Junior Achievement of Greater Washington during which RLJ employees taught local middle school students about principles of personal finance.
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Additionally, in response to the Los Angeles area wildfires in January 2025, several RLJ properties organized donations and care packages for victims and impacted families. We maintain our partnership with a number of other locally-based charitable organizations including the N Street Village, Bridges from School to Work, and Don Bosco Cristo Rey.
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With respect to our board, three trustees are women, five are ethnically diverse and seven are independent. Nearly 80% of our board has deep expertise and experience in risk management.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn addition, our declaration of trust limits the liability of our trustees and officers to us and our shareholders for monetary damages, except for liability resulting from the: • actual receipt of an improper benefit or profit in money, property or services; or 18 Table of Contents • active and deliberate dishonesty by the trustee or officer that was established by a final judgment as being material to the cause of action adjudicated.
Biggest changeIn addition, our declaration of trust limits the liability of our trustees and officers to us and our shareholders for monetary damages, except for liability resulting from the: • actual receipt of an improper benefit or profit in money, property or services; or • active and deliberate dishonesty by the trustee or officer that was established by a final judgment as being material to the cause of action adjudicated. 19 Table of Contents Our declaration of trust and bylaws obligate us, to the fullest extent permitted by Maryland law in effect from time to time, to indemnify and to pay or reimburse reasonable expenses in advance of the final disposition of a proceeding to any present or former trustee or officer who is made or threatened to be made a party to the proceeding by reason of his or her service to us in that capacity.
Our outstanding debt, and any additional debt borrowed in the future, may subject us to many risks, including the risk that: • our cash flows from operations may be insufficient to make required payments of principal and interest; • we may be required to use a substantial portion of our cash flows to pay principal and interest, which would reduce the cash available for distributions to our shareholders; 14 Table of Contents • we may be at a competitive disadvantage compared to our competitors that have less debt; • we may be vulnerable to economic volatility, particularly if growth were to slow or stall and reduce our flexibility to respond to difficult market, industry, or economic conditions; • the terms of any refinancing may not be in the same amount or on terms as favorable as the terms of the debt being refinanced; and • the use of leverage could adversely affect our ability to borrow more money for operations and capital improvements, to finance future acquisitions of hotel properties, to make distributions to our shareholders, and to repurchase common shares, and it could adversely affect the market price of our common shares.
Our outstanding debt, and any additional debt borrowed in the future, may subject us to many risks, including the risk that: • our cash flows from operations may be insufficient to make required payments of principal and interest; 14 Table of Contents • we may be required to use a substantial portion of our cash flows to pay principal and interest, which would reduce the cash available for distributions to our shareholders; • we may be at a competitive disadvantage compared to our competitors that have less debt; • we may be vulnerable to economic volatility, particularly if growth were to slow or stall and reduce our flexibility to respond to difficult market, industry, or economic conditions; • the terms of any refinancing may not be in the same amount or on terms as favorable as the terms of the debt being refinanced; and • the use of leverage could adversely affect our ability to borrow more money for operations and capital improvements, to finance future acquisitions of hotel properties, to make distributions to our shareholders, and to repurchase common shares, and it could adversely affect the market price of our common shares.
In addition, our hotel properties are subject to various operating risks common to the lodging industry, many of which are beyond our control, including, among others, the following: • seasonality of the lodging industry may cause quarterly fluctuations in our operating results; • over-building of hotels in the markets in which we operate, which results in an increased supply of hotels that will adversely affect Occupancy and revenues at our hotel properties; • consolidation among companies in the lodging industry may increase the resulting companies' negotiating power relative to ours, and decrease competition among those companies for management and franchise agreements, which could result in higher management or franchise fees; • increases in the number of brands owned by Marriott, Hilton and Hyatt, which could result in increased competition for our hotels; • competition from non-traditional accommodations for travelers, such as online services that market homes, apartments and condominiums as an alternative to hotel rooms; • dependence on business and leisure travelers; • increases in energy costs and other expenses affecting travel, which may affect travel patterns and reduce the number of business and leisure travelers; • increases in operating costs due to inflation and other factors that may not be offset by increased room rates; 16 Table of Contents • changes in governmental laws and regulations, fiscal policies and zoning ordinances and the related costs of compliance with laws and regulations, fiscal policies and ordinances; • adverse effects of international, national, regional and local economic and market conditions; • adverse effects of worsening conditions in the lodging industry; and • risks generally associated with the ownership of hotels and real estate, as we discuss in detail below.
In addition, our hotel properties are subject to various operating risks common to the lodging industry, many of which are beyond our control, including, among others, the following: • seasonality of the lodging industry may cause quarterly fluctuations in our operating results; • over-building of hotels in the markets in which we operate, which results in an increased supply of hotels that will adversely affect Occupancy and revenues at our hotel properties; • consolidation among companies in the lodging industry may increase the resulting companies' negotiating power relative to ours, and decrease competition among those companies for management and franchise agreements, which could result in higher management or franchise fees; • increases in the number of brands owned by Marriott, Hilton and Hyatt, which could result in increased competition for our hotels; • competition from non-traditional accommodations for travelers, such as online services that market homes, apartments and condominiums as an alternative to hotel rooms; • dependence on business and leisure travelers; 16 Table of Contents • increases in energy costs and other expenses affecting travel, which may affect travel patterns and reduce the number of business and leisure travelers; • increases in operating costs due to inflation and other factors that may not be offset by increased room rates; • changes in governmental laws and regulations, fiscal policies and zoning ordinances and the related costs of compliance with laws and regulations, fiscal policies and ordinances; • adverse effects of international, national, regional and local economic and market conditions; • adverse effects of worsening conditions in the lodging industry; and • risks generally associated with the ownership of hotels and real estate, as we discuss in detail below.
Such joint venture investments involve risks not otherwise present in a wholly-owned hotel property or a redevelopment project, including the following: 15 Table of Contents • we may not have exclusive control over the hotel property or the joint venture, which may prevent us from taking actions that are in our best interest but opposed by our partners; • joint venture agreements often restrict the transfer of a partner's interest or may otherwise restrict our ability to sell the interest when we desire, or on advantageous terms; • joint venture agreements may contain provisions pursuant to which one partner may initiate procedures requiring the other partner to choose between buying the other partner's interest or selling its interest to that partner; • a partner may, at any time, have economic or business interests or goals that are, or that may become, inconsistent with our business interests or goals; • a partner may fail to fund its share of required capital contributions or may become bankrupt, which would mean that we and any other remaining partners generally would remain liable for the joint venture's liabilities; or • we may, in certain circumstances, be liable for the actions of a partner, and the activities of a partner could adversely affect our ability to qualify as a REIT, even though we do not control the joint venture.
Such joint venture investments involve risks not otherwise present in a wholly-owned hotel property or a redevelopment project, including the following: • we may not have exclusive control over the hotel property or the joint venture, which may prevent us from taking actions that are in our best interest but opposed by our partners; • joint venture agreements often restrict the transfer of a partner's interest or may otherwise restrict our ability to sell the interest when we desire, or on advantageous terms; • joint venture agreements may contain provisions pursuant to which one partner may initiate procedures requiring the other partner to choose between buying the other partner's interest or selling its interest to that partner; • a partner may, at any time, have economic or business interests or goals that are, or that may become, inconsistent with our business interests or goals; • a partner may fail to fund its share of required capital contributions or may become bankrupt, which would mean that we and any other remaining partners generally would remain liable for the joint venture's liabilities; or • we may, in certain circumstances, be liable for the actions of a partner, and the activities of a partner could adversely affect our ability to qualify as a REIT, even though we do not control the joint venture.
As a result, we are particularly susceptible to adverse market conditions in these areas, including industry downturns, relocation of businesses, constrained municipal budgets, any oversupply of hotel rooms, criminal activity, political and societal unrest, supply-chain issues and inflationary pressures, or a reduction in lodging demand.
As a result, we are particularly susceptible to adverse market conditions in these areas, including industry downturns, relocation of businesses, constrained municipal budgets, any oversupply of hotel rooms, criminal activity, political and societal unrest, supply-chain issues, labor-related issues, and inflationary pressures, or a reduction in lodging demand.
Thus, compliance with the REIT distribution requirements may hinder our ability to grow, which could adversely affect the value of our shares. 20 Table of Contents If our leases are not respected as true leases for U.S. federal income tax purposes, we would likely fail to qualify as a REIT.
Thus, compliance with the REIT distribution requirements may hinder our ability to grow, which could adversely affect the value of our shares. 21 Table of Contents If our leases are not respected as true leases for U.S. federal income tax purposes, we would likely fail to qualify as a REIT.
Although we intend to monitor future acquisitions and improvements of hotels, the REIT provisions of the Code provide only 21 Table of Contents limited guidance for making determinations under the requirements for qualified lodging facilities, and there can be no assurance that these requirements will be satisfied in all cases.
Although we intend to monitor future acquisitions and improvements of hotels, the REIT provisions of the Code provide only 22 Table of Contents limited guidance for making determinations under the requirements for qualified lodging facilities, and there can be no assurance that these requirements will be satisfied in all cases.
In addition, we could face some challenges meeting workforce requirements resulting from changes in workforce dynamics, such as higher standards and working remotely or more flexibility, which could result in increased labor costs in the future. 12 Table of Contents Restrictive covenants in certain of our management and franchise agreements contain provisions limiting or restricting the sale or financing of our hotels, which could have a material and adverse effect on us.
In addition, we could face some challenges meeting workforce requirements resulting from changes in workforce dynamics, such as working remotely or needing more flexibility, which could result in increased labor costs in the future. 12 Table of Contents Restrictive covenants in certain of our management and franchise agreements contain provisions limiting or restricting the sale or financing of our hotels, which could have a material and adverse effect on us.
All distributions will be made at the discretion of our board of trustees and will depend on our historical and projected results of operations, EBITDA, funds from operations ("FFO"), liquidity and financial condition, REIT qualification, debt service requirements, capital expenditures and operating expenses, prohibitions and other restrictions under financing arrangements and applicable law and other factors as our board of trustees may deem relevant from time to time.
All distributions will be made at the discretion of our board of trustees and will depend on our historical and projected results of operations, EBITDA, funds from operations ("FFO"), liquidity and financial condition, REIT qualification, debt service requirements, capital 23 Table of Contents expenditures and operating expenses, prohibitions and other restrictions under financing arrangements and applicable law and other factors as our board of trustees may deem relevant from time to time.
As of December 31, 2024, 12 of our consolidated hotel properties, as well as one unconsolidated hotel property, were on land subject to ground leases. Accordingly, we only owned a leasehold or similar interest in 13 hotel properties.
As of December 31, 2025, 12 of our consolidated hotel properties, as well as one unconsolidated hotel property, were on land subject to ground leases. Accordingly, we only owned a leasehold or similar interest in 13 hotel properties.
At December 31, 2024, we had approximately $2.2 billion of debt outstanding, which could materially and adversely affect our operating performance and put us at a competitive disadvantage. Required repayments of debt and related interest may materially and adversely affect our operating performance. At December 31, 2024, we had approximately $2.2 billion of outstanding debt.
At December 31, 2025, we had approximately $2.2 billion of debt outstanding, which could materially and adversely affect our operating performance and put us at a competitive disadvantage. Required repayments of debt and related interest may materially and adversely affect our operating performance. At December 31, 2025, we had approximately $2.2 billion of outstanding debt.
In addition, we may incur substantial additional debt, including secured debt, in the future. After taking into consideration the effect of interest rate swaps, 69.5% of our payments are fixed or effectively fixed.
In addition, we may incur substantial additional debt, including secured debt, in the future. After taking into consideration the effect of interest rate swaps, 69.2% of our payments are fixed or effectively fixed.
We generally will attempt to resolve any such disputes through discussions and negotiations; however, if we are unable to reach satisfactory results through discussions and negotiations, we may choose to terminate our management agreement, litigate the dispute or submit the matter to third-party dispute resolution, the outcome of which may be unfavorable to us.
We generally will attempt to resolve any such disputes through discussions and negotiations; however, if we are unable to reach 11 Table of Contents satisfactory results through discussions and negotiations, we may choose to terminate our management agreement, litigate the dispute or submit the matter to third-party dispute resolution, the outcome of which may be unfavorable to us.
In the future, we may enter into additional joint ventures to acquire, develop, improve or partially dispose of hotel properties, thereby reducing the amount of capital required by us to make investments and diversifying our capital sources for growth.
In the future, we may enter into additional joint ventures to acquire, develop, improve or partially dispose of hotel properties, thereby reducing the amount of capital required by us to make 15 Table of Contents investments and diversifying our capital sources for growth.
Should an uninsured loss or a loss in excess of insured limits occur, or should we be unsuccessful in obtaining coverage from an insurance carrier, we could lose all or a portion of the capital we have invested in a hotel property, as well as the anticipated future revenue from the hotel property.
Should an uninsured loss or a loss in excess of insured limits occur, or should we be unsuccessful in obtaining coverage from an insurance carrier, we could lose all or a portion of the capital we have invested in a hotel property, as well as the anticipated future revenue from the hotel 20 Table of Contents property.
In the event that any of our management agreements are terminated, we can provide no assurances that we could find a replacement manager or that our franchisors will consent to a replacement manager in a timely manner, or at all, or that any 11 Table of Contents replacement manager will be successful in operating our hotels.
In the event that any of our management agreements are terminated, we can provide no assurances that we could find a replacement manager or that our franchisors will consent to a replacement manager in a timely manner, or at all, or that any replacement manager will be successful in operating our hotels.
Any economic slowdown or recession or weaker-than-anticipated growth could negatively impact demand for our hotel rooms, which in turn could materially and adversely affect our business, financial performance and condition, operating results and cash flows.
Any economic slowdown or recession or weaker-than-anticipated growth or political actions and policies could negatively impact demand for our hotel rooms, which in turn could materially and adversely affect our business, financial performance and condition, operating results and cash flows.
In that event, we might nevertheless remain obligated for any mortgage debt or other financial obligations related to the hotel property. 19 Table of Contents We could incur significant costs related to government regulation and litigation with respect to environmental matters, which could have a material and adverse effect on us.
In that event, we might nevertheless remain obligated for any mortgage debt or other financial obligations related to the hotel property. We could incur significant costs related to government regulation and litigation with respect to environmental matters, which could have a material and adverse effect on us.
We maintain comprehensive property insurance on all of our hotel properties and we intend to maintain comprehensive property insurance on any hotels that we acquire in the future, including fire, terrorism, and extended coverage. Our comprehensive property insurance program has a $250,000 deductible per claim.
We maintain comprehensive property insurance on all of our hotel properties and we intend to maintain comprehensive property insurance on any hotels that we acquire in the future, including fire, terrorism, and extended coverage. Our comprehensive property insurance program has a $250,000 self-insured retention per claim.
Any adverse developments in Aimbridge's or Hilton’s business, financial strength or ability to operate our hotel properties efficiently and effectively could have a material adverse effect on our results of operations. Costs associated with, or failure to maintain, franchisor operating standards may materially and adversely affect us.
Any adverse developments in any of our third-party managers' business, financial strength or ability to operate our hotel properties efficiently and effectively could have a material adverse effect on our results of operations. Costs associated with, or failure to maintain, franchisor operating standards may materially and adversely affect us.
We retain independent third-party hotel managers to operate our hotel properties pursuant to management agreements. As of December 31, 2024, all of our hotel properties had individual management agreements, 30 of which were with Aimbridge Hospitality ("Aimbridge") and 21 of which were with Hilton.
We retain independent third-party hotel managers to operate our hotel properties pursuant to management agreements. As of December 31, 2025, all of our hotel properties had individual management agreements, 26 of which were with Aimbridge Hospitality ("Aimbridge") and 21 of which were with Hilton.
Our hotels located in the Northern California, Southern California, South Florida, Chicago, Illinois, and Houston, Texas metropolitan areas accounted for approximately 13.2%, 11.0%, 9.0%, 6.6% and 5.8%, respectively, of our total number of rooms available for the fiscal year ended December 31, 2024.
Our hotels located in the Northern California, Southern California, South Florida, Chicago, Illinois, and Houston, Texas metropolitan areas accounted for approximately 13.4%, 11.1%, 9.1%, 6.5% and 5.8%, respectively, of our total number of rooms available for the fiscal year ended December 31, 2025.
In addition, in general, no more than 5% of the value of our assets (other than government securities and qualified real estate assets) can consist of the securities of any one issuer, no more than 20% of the value of our total assets can be represented by securities of one or more TRSs, and no more than 25% of the value of our total assets may be represented by debt instruments issued by publicly offered REITs that are "nonqualified" (i.e., not secured by real property or interests in real property).
In addition, in general, no more than 5% of the value of our assets (other than government securities and qualified real estate assets) can consist of the securities of any one issuer, no more than 20% of the value of our total assets (25% of the value of our total assets for taxable years beginning after December 31, 2025) can be represented by securities of one or more TRSs, and no more than 25% of the value of our total assets may be represented by debt instruments issued by publicly offered REITs that are "nonqualified" (i.e., not secured by real property or interests in real property).
Risks Related to Our Common Shares Our cash available for distribution to shareholders may not be sufficient to pay distributions at expected or required levels, and we may need to borrow funds or rely on other external sources in order to make such distributions, or we may not be able to make such distributions at all, which could cause the market price of our common shares to decline significantly. 22 Table of Contents We intend to continue to pay regular quarterly distributions to holders of our common shares.
Risks Related to Our Common Shares Our cash available for distribution to shareholders may not be sufficient to pay distributions at expected or required levels, and we may need to borrow funds or rely on other external sources in order to make such distributions, or we may not be able to make such distributions at all, which could cause the market price of our common shares to decline significantly.
Most of our hotel properties operate under either Marriott, Hilton or Hyatt brands; therefore, we are subject to the risks associated with concentrating our portfolio in just three brand families. 86 of the 96 hotel properties that we owned as of December 31, 2024 utilize brands owned by Marriott, Hilton or Hyatt.
Most of our hotel properties operate under either Marriott, Hilton or Hyatt brands; therefore, we are subject to the risks associated with concentrating our portfolio in just three brand families. 83 of the 93 hotel properties that we owned as of December 31, 2025 were affiliated with brands owned by Marriott, Hilton or Hyatt.
These covenants place restrictions on, among other things, our ability to incur additional indebtedness, incur liens on certain assets, engage in certain mergers, liquidations or consolidations, sell certain assets, make restricted payments (including the payment of dividends and other distributions), engage in certain transactions with affiliates, enter into sale and leaseback transactions, make investments and capital expenditures, and acquire real estate assets.
These covenants place restrictions on, among other things, our ability to incur additional indebtedness, incur liens on certain assets, engage in certain mergers, liquidations or consolidations, sell certain assets, make restricted payments (including the payment of dividends and other distributions), engage in certain transactions with affiliates, and make certain types of investments.
Furthermore, if Aimbridge and/or Hilton, as our largest providers of management services, are financially unable or unwilling to perform their obligations pursuant to our management agreements, our ability to find a replacement manager or managers for our Aimbridge- and/or Hilton-managed hotels could be challenging, costly and time consuming.
Furthermore, if any of our third-party managers, including Aimbridge and/or Hilton, are financially unable or unwilling to perform their obligations pursuant to our management agreements, our ability to find a replacement manager or managers for the impacted hotels could be challenging, costly and time consuming.
Our ability to meet our debt service obligations or refinance our debt depends on our future operating and financial performance and capacity to generate cash. Our performance and capacity to generate cash will be affected by our ability to implement our business strategy successfully, but also certain general economic, financial, competitive, regulatory and other factors beyond our control.
Our performance and capacity to generate cash will be affected by our ability to implement our business strategy successfully, but also certain general economic, financial, competitive, regulatory and other factors beyond our control.
Price volatility, dislocations and liquidity disruptions in the U.S. financial markets may negatively impact our ability to access additional financing for our capital needs, including growth, acquisition activities and other business initiatives, on 10 Table of Contents favorable terms or at all, which may negatively affect our business.
If demand does not increase in the near future, or if demand weakens, our future results of operations and growth prospects could be materially and adversely affected. 10 Table of Contents Price volatility, dislocations and liquidity disruptions in the U.S. financial markets may negatively impact our ability to access additional financing for our capital needs, including growth, acquisition activities and other business initiatives, on favorable terms or at all, which may negatively affect our business.
Inflation may also have an adverse effect on our operating expenses, including, but not limited to, labor, supplies, repairs and maintenance, as these costs could increase at a rate higher than our revenues. Inflation could also have an adverse effect on consumer spending, which could impact Occupancy levels at our hotel properties and, in turn, our own results of operations.
Inflation may also have an adverse effect on our operating expenses, including, but not limited to, labor, supplies, repairs and maintenance, as these costs could increase at a rate higher than our revenues.
Even when insurable, these policies may have high deductibles and/or high premiums. Certain of our coastal hotel properties each have a deductible of 5% of total insured value for a named storm, and our hotels located in areas susceptible to earthquakes have deductibles of up to 5% of total insured value.
Certain of our coastal hotel properties each have a retention of 5% of total insured value for a named storm, and our hotels located in areas susceptible to earthquakes have retentions of up to 5% of total insured value.
Our lenders may require such insurance and our failure to obtain such insurance could constitute a default under the loan agreements, which could have a material and adverse effect on us.
Our lenders may require such insurance and our failure to obtain such insurance could constitute a default under the loan agreements, which could have a material and adverse effect on us. In addition to the comprehensive property insurance, we maintain general liability insurance at all of our hotel properties.
The costs of these capital improvements may increase due to ongoing supply-chain disruptions and increased construction costs, and could materially and adversely affect us. In addition, due to supply-chain constraints and disruptions, we could face difficulties sourcing the goods and services in a timely manner, which could adversely affect us.
In addition, in the event of any supply-chain constraints and disruptions, we could face difficulties sourcing the goods and services in a timely manner, which could adversely affect us.
Even if the U.S. and global economies remain stable or grow in 2025, we cannot provide any assurances that demand for hotel rooms will increase from current levels. If demand does not increase in the near future, or if demand weakens, our future results of operations and growth prospects could be materially and adversely affected.
Even if the U.S. and global economies remain stable or grow in 2026, we cannot provide any assurances that demand for hotel rooms will increase from current levels.
We require a significant amount of cash to service our debt and sustain our operations. Our ability to generate cash depends on many factors beyond our control, and we may not be able to generate cash required to service our debt.
Our ability to generate cash depends on many factors beyond our control, and we may not be able to generate cash required to service our debt. Our ability to meet our debt service obligations or refinance our debt depends on our future operating and financial performance and capacity to generate cash.
Any failure to maintain proper function, security and availability of information technology networks and systems could interrupt our operations, our financial reporting and compliance, damage our reputation, and subject us to liability claims or regulatory penalties, which could have a material and adverse effect on our business, financial condition and results of operations.
Any failure to maintain proper function, security and availability of information technology networks and systems or any actual or perceived cybersecurity incident or disruption affecting our own or our hotel managers’ and franchisors’ information technology networks and systems or those upon which we rely could interrupt our operations, our financial reporting and compliance, significantly impact our financial condition, cash flows and the market price of our common shares, damage our reputation, result in significant remediation expenses and increased cybersecurity protection and insurance costs and subject us to liability claims or regulatory scrutiny or penalties, which could have a material and adverse effect on our business, financial condition and results of operations.
There can be no assurance that 17 Table of Contents natural disasters, weather events, or climate change will not have a material adverse effect on our hotel properties, operations or business.
There can be no assurance that natural disasters, weather events, or climate change will not have a material adverse effect on our hotel properties, operations or business. 18 Table of Contents Risks Related to Our Organization and Structure The share ownership limits imposed by the Code for REITs and our declaration of trust may restrict share transfers and/or business combination opportunities.
Technology is used in our operations, and any material failure, inadequacy, interruption or security failure of that technology could harm the business. We, and our hotel managers and franchisors, rely on information technology networks and systems to process, transmit and store electronic information, and to manage or support a variety of business processes.
We, and our hotel managers and franchisors, rely on information technology networks and systems, potentially including artificial intelligence ("AI"), to process, transmit and store electronic information, including personal or confidential information, and to manage or support a variety of business processes.
Further, from time to time, changes in state and local tax laws or regulations are enacted, which may result in an increase in our tax liability. Any legislative action may prospectively or retroactively modify our tax treatment and, therefore, may adversely affect our taxation or taxation of our shareholders.
Any legislative action may prospectively or retroactively modify our tax treatment and, therefore, may adversely affect our taxation or taxation of our shareholders.
In addition to the comprehensive property insurance, we maintain general liability insurance at all of our hotel properties. Our general liability insurance program has no deductible. Certain types of catastrophic losses, such as windstorms, earthquakes, floods, and losses from foreign and domestic terrorist activities may not be insurable or may not be economically insurable.
Certain types of catastrophic losses, such as windstorms, earthquakes, floods, and losses from foreign and domestic terrorist activities may not be insurable or may not be economically insurable. Even when insurable, these policies may have high retentions and/or high premiums.
In addition, according to publicly released statements, a top legislative priority of the current administration and Congress may be significant reform of the Code, including significant changes to taxation of business entities. We cannot predict whether, when or to what extent new U.S. federal tax laws, regulations, interpretations or rulings will be adopted.
We cannot predict whether, when or to what extent new U.S. federal tax laws, regulations, interpretations or rulings will be adopted. Further, from time to time, changes in state and local tax laws or regulations are enacted, which may result in an increase in our tax liability.
These information technology networks and systems can be vulnerable to threats such as system, network or internet failures; computer hacking or business disruption; cyber-terrorism; viruses, worms or other malicious software programs; and employee error, negligence or fraud.
These information technology networks and systems can be vulnerable to threats or risks arising from a cybersecurity incident, such as system, network or internet failures; cyber attacks (including malware attacks, unauthorized access attempts and denial of service and other unintentional intrusions or malicious cyber attacks); cyber-terrorism; social engineering (including phishing); cyber extortion (including ransomware) or other fraudulent schemes; and intentional or unintentional intrusions or interruptions.
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Additionally, our hotels located in the Austin, Texas metropolitan area, which accounted for 3.0% of our total number of rooms available for the fiscal year ended December 31, 2024, face the risk of the anticipated closure of the Austin Convention Center in 2025, which could result in a decrease in lodging demand in this market.
Added
Additionally, proposed or enacted tariffs on imported goods, including construction materials, furniture, and equipment, may further exacerbate inflationary pressures on renovation costs and limit the availability of certain supplies, thereby increasing the cost and/or delaying the timing of planned capital projects.
Removed
Risks Related to Our Organization and Structure The share ownership limits imposed by the Code for REITs and our declaration of trust may restrict share transfers and/or business combination opportunities.
Added
Inflation could also have an adverse effect on consumer spending, which could impact demand at our hotel properties and, in turn, our results of operations. We require a significant amount of cash to service our debt and sustain our operations.
Removed
Our declaration of trust and bylaws obligate us, to the fullest extent permitted by Maryland law in effect from time to time, to indemnify and to pay or reimburse reasonable expenses in advance of the final disposition of a proceeding to any present or former trustee or officer who is made or threatened to be made a party to the proceeding by reason of his or her service to us in that capacity.
Added
Additionally, our hotels may be impacted by periodic and prolonged closures, renovations and expansion of convention centers that are significant drivers of demand.
Added
Changes in U.S. policies that discourage immigration, restrict the number of immigrants permitted into the U.S., or negatively impact certain types of work visas, may put further inflationary pressures on labor costs if there is a material decrease in available and/or willing workers.
Added
The costs of these capital improvements may increase due to supply-chain disruptions, increased construction costs, and proposed or enacted tariffs on imported goods, including construction materials and FF&E, and could materially and adversely affect us.
Added
Technology, potentially including artificial intelligence, is used in our operations, and any material failure, inadequacy, interruption or security failure of that technology could harm the business.
Added
Such cybersecurity incidents or other disruptions may be caused by individuals within our organization (including by employee error, negligence or fraud), individuals outside our organization with authorized access or unauthorized individuals from outside our organization.
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Further, adoption of AI tools by us or by third parties may pose new cybersecurity challenges. Threat actors may use AI tools to automate and enhance cybersecurity attacks against us.
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We use software and platforms designed to detect such cybersecurity threats, including AI-based tools, but these threats could become more sophisticated and harder to detect and counteract, which may pose significant risks to our data security and systems.
Added
Due to the complexity and interconnectedness of our information technology networks and systems, and those upon which we and our hotel managers and franchisors rely, the process of upgrading or patching protective measures could itself create a risk of cybersecurity issues or system disruptions for the Company, as well as for our hotel managers, franchisors, and others who rely upon, or have exposure to, such information technology networks and systems.
Added
In addition, increased regulation of data collection, use and retention practices, including self-regulation and industry standards, changes in existing laws and regulations, enactment of new laws and regulations, increased enforcement activity, and changes 17 Table of Contents in interpretation of laws, could increase our cost of compliance and operation, limit our ability to grow our business or otherwise harm the Company.
Added
In the conduct of our business, both we and our hotel managers and franchisors rely on relationships with third parties, including cloud data storage and other information technology service providers, suppliers, distributors, contractors and other external business partners, for certain functions or for services in support of key portions of our operations.
Added
These third-party entities are subject to similar risks related to cybersecurity, privacy violations, and business interruption, and an attack against such third-party service provider or partner could have a material adverse effect on our business.
Added
While we may be entitled to damages if our third-party service providers fail to satisfy their cybersecurity-related obligations to us, any award may be insufficient to cover our damages, or we may be unable to recover such award.
Added
Additionally, the use or lack of use of AI by us, our hotel managers, franchisors, and vendors poses risks that could negatively affect our business. The current and potential future applications of these AI tools are rapidly evolving, as are the legal and regulatory frameworks that govern them.
Added
While AI tools can improve efficiency, they may also introduce errors or inadequacies that are not easily detectable, including inaccuracies, deficiencies, bias, intellectual property concerns, and data privacy risks. Although we implement measures designed to help prevent such errors or inadequacies, those measures may not always be successful.
Added
AI could significantly disrupt the markets in which we operate and subject us to increased competition, legal and regulatory risks and compliance costs, which could have a material adverse effect on our business, our financial condition and results of operations.
Added
We also face competitive risks related to the adoption and application of new technologies by established market participants or new entrants. Vendors may use AI without meeting regulatory standards, potentially leading to cybersecurity incidents and reputational damage. Furthermore, market participants, including us, using AI for financial analysis could misinterpret data, resulting in flawed conclusions or investment decisions.
Added
Beginning January 30, 2025, we have established a general liability self-insured retention for the majority of our hotel properties of $500,000 per claim. Our general liability policies provide coverage for claim amounts that exceed our self-insured retention.
Added
We intend to continue to pay regular quarterly distributions to holders of our common shares.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur information security policies are modeled against the National Institute of Standards and Technology’s Cybersecurity Standards and incorporate concepts from the Zero Trust Framework. Given the ever-changing cybersecurity landscape, our IT Committee regularly meets to identify opportunities for incremental improvements, assess additional layers of security, and evaluate new technologies for implementation.
Biggest changeGiven the ever-changing cybersecurity landscape, our IT Committee regularly meets to identify opportunities for incremental improvements, assess additional layers of security, and evaluate new technologies for implementation. In addition, we engage, as necessary, cybersecurity experts to analyze our IT policies, procedures, and infrastructure to assess their effectiveness and to identify opportunities for improvement.
Item 1C. Cybersecurity Risk Management and Strategy We are committed to properly addressing the cybersecurity threats we face, and we have processes to assess, identify, and manage material risks from cybersecurity threats. We apply a comprehensive approach to the mitigation of cybersecurity risks.
Item 1C. Cybersecurity Risk Management and Strategy We are committed to properly addressing the cybersecurity threats we face, and we have processes to assess, identify, and manage risks from cybersecurity threats. We apply a robust approach to the identification, mitigation and management of cybersecurity risks.
We have established 23 Table of Contents policies, including those related to privacy, information security and cybersecurity, and we employ a broad and diversified set of mitigation strategies and techniques to reduce cybersecurity risks, including continuous monitoring, early detection tools, proactive vulnerability management, and remediation.
We have established policies, including those related to privacy, information security and cybersecurity, and we employ a broad and diversified set of mitigation strategies and techniques to reduce cybersecurity risks, including continuous monitoring, early 24 Table of Contents detection tools, and proactive vulnerability management. Our information security policies are informed by the National Institute of Standards and Technology’s Cybersecurity Standards.
Employees also are subject to spear-phishing training campaigns, which allow us to assess the effectiveness of our training programs. Our management companies are ultimately responsible for our guests' information, and we monitor these companies, as well as other third-party service providers, to ensure that they are complying with our privacy, information security and cybersecurity policies.
Our management companies are ultimately responsible for our guests' information, and we monitor these companies, as well as other third-party service providers, to ensure that they are complying with our privacy, information security and cybersecurity policies. We also assess the cybersecurity proficiency of potential third-party cloud suppliers before utilizing their services.
Our IT internal controls are audited by our external auditor as part of our Sarbanes-Oxley Act compliance activities, and this process includes assessing the design and operating effectiveness of those controls.
We work closely with our internal and external auditors to assess, identify and manage cybersecurity risks. Our internal controls over financial reporting, which include certain of our IT internal controls, are audited by our external auditor as part of our Sarbanes-Oxley Act compliance activities, and this process includes assessing the design and operating effectiveness of those controls.
Management has not identified cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition. See “Item 1A. Risk Factors” above for more information.
Although we have experienced phishing and similar attempts for unauthorized access to our information technology systems and data, during the past three years, management has not identified cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition.
In addition, we engage, as necessary, cybersecurity experts to analyze our IT policies, procedures, and infrastructure to assess their effectiveness and to identify opportunities for improvement. We conduct an annual information security compliance training for all employees to enable them to detect and report malware, ransomware, and other malicious software and social engineering attempts that may compromise our IT systems.
We conduct an annual information security compliance training for employees to better enable them to detect and report malware, ransomware, and other malicious software and social engineering attempts that may compromise our IT systems. Employees also are subject to spear-phishing training campaigns, which helps us to assess the effectiveness of our training programs.
Gibson also has experience assessing and addressing cybersecurity risks through her past professional experience. Our Audit Committee has primary responsibility for the oversight of risks from cybersecurity threats. Management, including members of the IT Committee, reports at least annually to the Audit Committee regarding cybersecurity risks and mitigation strategies.
Nathaniel A. Davis has expertise in information technology and experience reviewing and addressing cybersecurity risks. Patricia L. Gibson also has experience assessing and addressing cybersecurity risks through her past professional experience. Our Audit Committee has primary responsibility for the oversight of risks from cybersecurity threats.
Governance Our board of trustees is responsible for overseeing the assessment and management of enterprise-level risks that may impact us, including cybersecurity. Two board members have information security expertise from their professional experience. Nathaniel A. Davis has expertise in information technology and experience reviewing and addressing cybersecurity risks. Patricia L.
However, evolving cybersecurity threats make it increasingly challenging to anticipate, detect and defend against cybersecurity threats and incidents. See “Item 1A. Risk Factors” above for more information. Governance Our board of trustees is responsible for overseeing the assessment and management of enterprise-level risks that may impact us, including cybersecurity. Two board members have information security expertise from their professional experience.
We believe our cybersecurity incident response plan will help ensure timely, consistent and compliant responses to actual or attempted data incidents impacting our company. The cybersecurity incident response plan includes an escalation framework, including processes for informing the board of trustees of material cybersecurity incidents.
The cybersecurity incident response plan includes an escalation framework, including processes for informing the board of trustees of material cybersecurity incidents.
Removed
We also assess the cybersecurity proficiency of potential third-party cloud suppliers before utilizing their services. We work closely with our internal and external auditors to assess, identify and manage cybersecurity risks.
Added
Management, including members of the IT Committee, reports at least annually to the Audit Committee regarding the Company's enterprise risk management, cybersecurity risks and mitigation strategies and will report cybersecurity incidents to the Audit Committee as they occur, if material. The Audit Committee will inform the full board of trustees regarding significant cybersecurity incidents, as appropriate.
Removed
Any failure to maintain proper function, security and availability of our information technology networks and systems could interrupt our operations, our financial reporting and compliance, damage our reputation, and subject us to liability claims or regulatory penalties, which could have a material and adverse effect on our business, financial condition and results of operations.
Added
In addition to implementing and monitoring safeguards to minimize the chance and potential impact of a cybersecurity incident, we have established a cybersecurity incident response plan that is designed to effectively address cybersecurity threats that may occur despite these safeguards and help ensure timely and consistent responses to actual or attempted cybersecurity incidents impacting our company.
Removed
We consider each member of our Audit Committee to possess information security experience by way of their oversight responsibilities over this area. In addition to ensuring adequate safeguards are in place to minimize the chance of a successful cyber attack, we have established a cybersecurity incident response plan to effectively address any cybersecurity threat that may occur despite these safeguards.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeProperties Our Hotel Properties The following table provides a comprehensive list of our hotel properties as of December 31, 2024: State Hotel Property Name Rooms State Hotel Property Name Rooms Alabama Indiana Embassy Suites Birmingham 242 Courtyard Indianapolis @ The Capitol 124 Arizona Residence Inn Indianapolis Downtown On The Canal 134 Embassy Suites Phoenix - Biltmore 232 Kentucky 24 Table of Contents State Hotel Property Name Rooms State Hotel Property Name Rooms California Marriott Louisville Downtown 620 Courtyard San Francisco 166 Residence Inn Louisville Downtown 140 Embassy Suites Irvine Orange County 293 Louisiana Embassy Suites Los Angeles Downey 220 Chateau LeMoyne - French Quarter, New Orleans (1) 171 Embassy Suites Los Angeles - International Airport South 349 Hilton Garden Inn New Orleans Convention Center 286 Embassy Suites Milpitas Silicon Valley 267 Hotel Tonnelle New Orleans, a Tribute Portfolio Hotel 132 Embassy Suites San Francisco Airport - South San Francisco 316 Wyndham New Orleans - French Quarter 374 Embassy Suites San Francisco Airport - Waterfront 340 Maryland Hilton Garden Inn Los Angeles Hollywood 160 Residence Inn Bethesda Downtown 188 Hilton Garden Inn San Francisco Oakland Bay Bridge 303 Residence Inn National Harbor Washington DC 162 Hyatt House Cypress Anaheim 142 Massachusetts Hyatt House Emeryville San Francisco Bay Area 234 AC Hotel Boston Downtown 205 Hyatt House San Diego Sorrento Mesa 193 Embassy Suites Boston Waltham 275 Hyatt House San Jose Silicon Valley 180 Wyndham Boston Beacon Hill 304 Hyatt House San Ramon 142 Minnesota Hyatt House Santa Clara 150 Embassy Suites Minneapolis - Airport 310 Hyatt Place Fremont Silicon Valley 151 New York The Pierside Santa Monica 132 Courtyard New York Manhattan Upper East Side 226 Residence Inn Palo Alto Los Altos 156 Hampton Inn Garden City 143 San Francisco Marriott Union Square 401 The Knickerbocker New York (2) 330 Wyndham San Diego Bayside 600 North Carolina Zachari Dunes on Mandalay Beach, Curio Collection by Hilton 250 Hyatt House Charlotte Center City 163 Colorado Oregon Hotel Teatro 110 Courtyard Portland City Center 256 Marriott Denver South @ Park Meadows 279 SpringHill Suites Portland Hillsboro 106 Moxy Denver Cherry Creek 170 Pennsylvania Renaissance Boulder Flatiron Hotel 232 Hilton Garden Inn Pittsburgh University Place 202 District of Columbia Renaissance Pittsburgh Hotel 300 Fairfield Inn & Suites Washington DC Downtown 198 Wyndham Philadelphia Historic District 364 Homewood Suites Washington DC Downtown 175 Courtyard Pittsburgh University Center 253 Hyatt Place Washington DC Downtown K Street 164 South Carolina Courtyard Charleston Historic District 176 Florida Mills House Charleston, Curio Collection by Hilton 218 DoubleTree Grand Key Resort 216 Tennessee DoubleTree Suites by Hilton Orlando - Lake Buena Vista 236 The Bankers Alley Hotel, a Tapestry Collection by Hilton 124 Embassy Suites Deerfield Beach - Resort & Spa 244 Texas Embassy Suites Fort Lauderdale 17th Street 361 Courtyard Austin Downtown Convention Center 270 Embassy Suites Fort Myers Estero 150 Courtyard Houston By The Galleria 190 Embassy Suites Miami - International Airport 318 Courtyard Houston Downtown Convention Center 191 Embassy Suites Orlando - International Drive South/Convention Center 244 DoubleTree by Hilton Houston Medical Center Hotel & Suites 297 Embassy Suites Tampa Downtown Convention Center 360 DoubleTree Suites by Hilton Austin 188 Embassy Suites West Palm Beach Central 194 Embassy Suites Dallas - Love Field 248 Fairfield Inn & Suites Key West 106 Hyatt Centric The Woodlands 72 Hilton Cabana Miami Beach 231 Residence Inn Austin Downtown Convention Center 179 Renaissance Fort Lauderdale West Hotel 250 Residence Inn Houston By The Galleria 146 Georgia Residence Inn Houston Downtown Convention Center 171 Courtyard Atlanta Buckhead 181 SpringHill Suites Houston Downtown Convention Center 167 Embassy Suites Atlanta - Buckhead 326 Washington Hampton Inn and Suites Atlanta Midtown 186 Homewood Suites Seattle Lynnwood 170 25 Table of Contents State Hotel Property Name Rooms State Hotel Property Name Rooms Hyatt Centric Midtown Atlanta 194 Wisconsin Residence Inn Atlanta Midtown Historic 90 Hyatt Place Madison Downtown 151 Hawaii Courtyard Waikiki Beach 404 Illinois Courtyard Chicago Downtown Magnificent Mile 306 Courtyard Midway Airport 174 Fairfield Inn & Suites Chicago Midway Airport 114 Hampton Inn Chicago Midway Airport 170 Hilton Garden Inn Chicago Midway Airport 174 Holiday Inn Express & Suites Midway Airport 104 Marriott Chicago Midway 200 Sleep Inn Midway Airport 121 (1) We own an indirect 50% ownership interest in this hotel property and we account for the ownership interest using the equity method of accounting.
Biggest changeProperties Our Hotel Properties The following table provides a comprehensive list of our hotel properties as of December 31, 2025: State Hotel Property Name Rooms State Hotel Property Name Rooms Alabama Indiana Embassy Suites Birmingham 242 Courtyard Indianapolis @ The Capitol 124 Arizona Residence Inn Indianapolis Downtown On The Canal 134 Embassy Suites Phoenix - Biltmore 232 Kentucky 25 Table of Contents State Hotel Property Name Rooms State Hotel Property Name Rooms California Marriott Louisville Downtown 620 Courtyard San Francisco 166 Residence Inn Louisville Downtown 140 Embassy Suites Irvine Orange County 293 Louisiana Embassy Suites Los Angeles Downey 220 Chateau LeMoyne - French Quarter, New Orleans (1) 171 Embassy Suites Los Angeles - International Airport South 349 Hilton Garden Inn New Orleans Convention Center 286 Embassy Suites Milpitas Silicon Valley 267 Hotel Tonnelle New Orleans, a Tribute Portfolio Hotel 132 Embassy Suites San Francisco Airport - South San Francisco 316 Wyndham New Orleans - French Quarter 374 Embassy Suites San Francisco Airport - Waterfront 340 Maryland Hilton Garden Inn Los Angeles Hollywood 160 Residence Inn Bethesda Downtown 188 Hilton Garden Inn San Francisco Oakland Bay Bridge 303 Residence Inn National Harbor Washington DC 162 Hyatt House Cypress Anaheim 142 Massachusetts Hyatt House Emeryville San Francisco Bay Area 234 AC Hotel Boston Downtown 205 Hyatt House San Diego Sorrento Mesa 193 Embassy Suites Boston Waltham 275 Hyatt House San Jose Silicon Valley 180 Wyndham Boston Beacon Hill 304 Hyatt House San Ramon 142 Minnesota Hyatt House Santa Clara 150 Embassy Suites Minneapolis - Airport 310 Hyatt Place Fremont Silicon Valley 151 New York Residence Inn Palo Alto Los Altos 156 Courtyard New York Manhattan Upper East Side 226 San Francisco Marriott Union Square 401 Hampton Inn Garden City 143 The Pierside Santa Monica 132 The Knickerbocker New York (2) 330 Wyndham San Diego Bayside 600 North Carolina Zachari Dunes on Mandalay Beach, Curio Collection by Hilton 250 Hyatt House Charlotte Center City 163 Colorado Oregon Hotel Teatro 110 Courtyard Portland City Center 256 Marriott Denver South @ Park Meadows 279 SpringHill Suites Portland Hillsboro 106 Moxy Denver Cherry Creek 170 Pennsylvania Renaissance Boulder Flatiron Hotel 232 Courtyard Pittsburgh University Center 253 District of Columbia Hilton Garden Inn Pittsburgh University Place 202 Fairfield Inn & Suites Washington DC Downtown 198 Renaissance Pittsburgh Hotel 300 Homewood Suites Washington DC Downtown 175 Wyndham Philadelphia Historic District 364 Hyatt Place Washington DC Downtown K Street 164 South Carolina Florida Courtyard Charleston Historic District 176 DoubleTree Grand Key Resort 216 Mills House Charleston, Curio Collection by Hilton 218 DoubleTree Suites by Hilton Orlando - Lake Buena Vista 236 Tennessee Embassy Suites Deerfield Beach - Resort & Spa 244 The Bankers Alley Hotel, a Tapestry Collection by Hilton 124 Embassy Suites Fort Lauderdale 17th Street 361 Texas Embassy Suites Fort Myers Estero 150 Courtyard Austin Downtown Convention Center 270 Embassy Suites Miami - International Airport 318 Courtyard Houston By The Galleria 190 Embassy Suites Orlando - International Drive South/Convention Center 244 Courtyard Houston Downtown Convention Center 191 Embassy Suites Tampa Downtown Convention Center 360 DoubleTree by Hilton Houston Medical Center Hotel & Suites 297 Embassy Suites West Palm Beach Central 194 DoubleTree Suites by Hilton Austin 195 Fairfield Inn & Suites Key West 106 Hyatt Centric The Woodlands 72 Hilton Cabana Miami Beach 231 Residence Inn Austin Downtown Convention Center 179 Renaissance Fort Lauderdale West Hotel 250 Residence Inn Houston Downtown Convention Center 171 Georgia SpringHill Suites Houston Downtown Convention Center 167 Embassy Suites Atlanta - Buckhead 326 Washington Hampton Inn and Suites Atlanta Midtown 186 Homewood Suites Seattle Lynnwood 170 Hyatt Centric Midtown Atlanta 194 Wisconsin Residence Inn Atlanta Midtown Historic 90 Hyatt Place Madison Downtown 151 Hawaii 26 Table of Contents State Hotel Property Name Rooms State Hotel Property Name Rooms Courtyard Waikiki Beach 404 Illinois Courtyard Chicago Downtown Magnificent Mile 306 Courtyard Midway Airport 174 Fairfield Inn & Suites Chicago Midway Airport 114 Hampton Inn Chicago Midway Airport 170 Hilton Garden Inn Chicago Midway Airport 174 Holiday Inn Express & Suites Midway Airport 104 Marriott Chicago Midway 200 Sleep Inn Midway Airport 121 (1) We own an indirect 50% ownership interest in this hotel property and we account for the ownership interest using the equity method of accounting.
Ground Leases As of December 31, 2024, 12 of our consolidated hotel properties and one unconsolidated hotel property were subject to ground lease agreements that cover the land under the respective hotel properties. Additional information on the ground leases can be found in Note 10 to our accompanying consolidated financial statements.
Ground Leases As of December 31, 2025, 12 of our consolidated hotel properties and one unconsolidated hotel property were subject to ground lease agreements that cover the land under the respective hotel properties. Additional information on the ground leases can be found in Note 10 to our accompanying consolidated financial statements.
All of our hotel properties are operated pursuant to a management agreement with one of 16 independent management companies. 36 of our hotel properties receive the benefits of a franchise agreement pursuant to a management agreement with Hilton, Hyatt, Marriott, or other management companies.
All of our hotel properties are operated pursuant to a management agreement with one of 16 independent management companies. 37 of our hotel properties receive the benefits of a franchise agreement pursuant to a management agreement with Hilton, Hyatt, Marriott, or other management companies.
Franchise Agreements As of December 31, 2024, 57 of our hotels operated under franchise agreements with Marriott, Hilton, Hyatt or other hotel brands. This excludes 36 hotel properties that receive the benefits of a franchise agreement pursuant to management agreements with Hilton, Hyatt, Marriott, or other management companies.
Franchise Agreements As of December 31, 2025, 53 of our hotels operated under franchise agreements with Marriott, Hilton, Hyatt or other hotel brands. This excludes 37 hotel properties that receive the benefits of a franchise agreement pursuant to management agreements with Hilton, Hyatt, Marriott, or other management companies.
As of December 31, 2024, Aimbridge and Hilton were the management companies for 30 and 21 of our hotel properties, respectively. Our remaining 45 hotel properties were managed by 14 other management companies, including Hyatt and Marriott.
As of December 31, 2025, Aimbridge and Hilton were the management companies for 26 and 21 of our hotel properties, respectively. Our remaining 46 hotel properties were managed by 14 other management companies, including Hyatt and Marriott.
The TRS leases require our TRS lessees to pay rent, management fees, franchise fees, personal property taxes where applicable, certain insurance policies, and all other costs and expenses, including utility and other charges, incurred in the operation of the hotels.
Certain TRS lessees only pay percentage rent on room revenue. 28 Table of Contents The TRS leases require our TRS lessees to pay rent, management fees, franchise fees, personal property taxes where applicable, certain insurance policies, and all other costs and expenses, including utility and other charges, incurred in the operation of the hotels.
Our TRS leases are also subject to early termination upon the occurrence of certain events of default and/or other contingencies described in the lease. 27 Table of Contents Amounts Payable under the Leases During the term of each TRS lease, our TRS lessees are obligated to pay us a fixed annual base rent plus a percentage rent and certain other additional charges that our TRS lessees agree to pay under the terms of the respective TRS lease.
Amounts Payable under the Leases During the term of each TRS lease, our TRS lessees are obligated to pay us a fixed annual base rent plus a percentage rent and certain other additional charges that our TRS lessees agree to pay under the terms of the respective TRS lease.
Certain management agreements also stipulate that in the event that a management company elects to terminate a management agreement due to an event of default by us, the management company may elect to recover a termination fee, as liquidated damages, equal to 2.5 times the actual base management fee and incentive management fee earned by the management company under that management agreement in the fiscal year immediately preceding the fiscal year in which such termination occurred. 26 Table of Contents Many of our Aimbridge, White Lodging Services ("WLS"), and Hersha Hospitality Management ("HHM") management agreements state that we cannot sell the applicable hotel property to any unrelated third party or engage in certain change of control actions (1) if we are in default under the management agreement, or (2) with or to a person or entity that is known in the community as being of bad moral character or has been convicted of a felony or is in control of or controlled by persons convicted of a felony or would be in violation of any franchise agreement requirements applicable to us.
Many of our Aimbridge, White Lodging Services ("WLS"), and Hersha Hospitality Management ("HHM") management agreements state that we cannot sell the applicable hotel property to any unrelated third party or engage in certain change of control actions (1) if we are in default under the management agreement, or (2) with or to a person or entity that is known in the community as being of bad moral character or has been convicted of a felony or is in control of or controlled by persons 27 Table of Contents convicted of a felony or would be in violation of any franchise agreement requirements applicable to us.
Removed
The percentage rent is generally calculated based on the revenues generated from the rental of guest rooms. Certain TRS lessees also pay percentage rent on food and beverage sales and certain other sources, including meeting room rentals.
Added
Certain management agreements also stipulate that in the event that a management company elects to terminate a management agreement due to an event of default by us, the management company may elect to recover a termination fee, as liquidated damages, equal to 2.5 times the actual base management fee and incentive management fee earned by the management company under that management agreement in the fiscal year immediately preceding the fiscal year in which such termination occurred.
Added
Our TRS leases are also subject to early termination upon the occurrence of certain events of default and/or other contingencies described in the lease.
Added
For the majority of our hotels, percentage rent is calculated based on the total revenues generated by the hotel.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

11 edited+0 added−1 removed7 unchanged
Biggest changeIssuer Purchases of Equity Securities The following table summarizes all of the share repurchases during the quarter ended December 31, 2024: Period Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Maximum number of shares that may yet be purchased under the plans or programs (1) October 1, 2024 through October 31, 2024 327,697 $ 9.16 327,697 25,904,232 November 1, 2024 through November 30, 2024 — $ — — 22,453,717 December 1, 2024 through December 31, 2024 — $ — — 22,453,717 Total 327,697 327,697 (1) A share repurchase program to acquire up to an aggregate of $250.0 million of common and preferred shares was approved in April 2024 and is set to expire on May 8, 2025 (the "2024 Share Repurchase Program").
Biggest changeUnregistered Sales of Equity Securities The Company did not sell any securities during the fiscal year ended December 31, 2025 that were not registered under the Securities Act. 31 Issuer Purchases of Equity Securities The following table summarizes all of the share repurchases during the quarter ended December 31, 2025: Period Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Maximum number of shares that may yet be purchased under the plans or programs (1) October 1, 2025 through October 31, 2025 — $ — — 36,136,600 November 1, 2025 through November 30, 2025 — $ — — 32,590,037 December 1, 2025 through December 31, 2025 — $ — — 32,983,743 Total — — (1) A share repurchase program to acquire up to an aggregate of $250.0 million of common and preferred shares was approved in April 2025 and is set to expire on May 8, 2026 (the "2025 Share Repurchase Program").
The maximum number of shares that may yet be repurchased under the 2024 Share Repurchase Program is calculated by dividing the total dollar amount available to repurchase shares by the closing price of our common shares on the last business day of the respective month. Item 6. Reserved
The maximum number of shares that may yet be repurchased under the 2025 Share Repurchase Program is calculated by dividing the total dollar amount available to repurchase shares by the closing price of our common shares on the last business day of the respective month. Item 6. Reserved
The graph and the table compare the total shareholder return of our common shares against the cumulative total returns of the Standard & Poor's 500 Index ("S&P 500 Index") and the Dow Jones U.S. Select Real Estate Hotels Index ("Dow Jones US REIT Hotels Index") between December 31, 2019 and December 31, 2024.
The graph and the table compare the total shareholder return of our common shares against the cumulative total returns of the Standard & Poor's 500 Index ("S&P 500 Index") and the Dow Jones U.S. Select Real Estate Hotels Index ("Dow Jones US REIT Hotels Index") between December 31, 2020 and December 31, 2025.
During the year ended December 31, 2023, we paid a cash dividend of $0.08 per common share in each of the first and second quarters of 2023 and a cash dividend of $0.10 per common share in each of the third and fourth quarters of 2023.
During the year ended December 31, 2024, we paid a cash dividend of $0.10 per common share in each of the first and second quarters of 2024 and a cash dividend of $0.15 per common share in each of the third and fourth quarters of 2024.
In order to qualify and maintain our qualification for taxation as a REIT, we intend to make annual distributions to our shareholders of at least 90% of our REIT taxable income, determined without regard to the deduction for dividends paid and excluding any net capital gain.
Distribution Information We intend, over time, to make quarterly distributions to our common shareholders. In order to qualify and maintain our qualification for taxation as a REIT, we intend to make annual distributions to our shareholders of at least 90% of our REIT taxable income, determined without regard to the deduction for dividends paid and excluding any net capital gain.
In order to comply with certain requirements related to our qualification as a REIT, our declaration of trust provides that, subject to certain exceptions, no person or entity (other than a person or entity who has been granted an exception) may directly or indirectly, beneficially or constructively, own more than 9.8% of the aggregate of our outstanding common shares, by value or by number of shares, whichever is more restrictive, or 9.8% of the aggregate of the outstanding preferred shares of any class or series, by value or by number of shares, whichever is more restrictive. 30 Distribution Information We intend, over time, to make quarterly distributions to our common shareholders.
In order to comply with certain requirements related to our qualification as a REIT, our declaration of trust provides that, subject to certain exceptions, no person or entity (other than a person or entity who has been granted an exception) may directly or indirectly, beneficially or constructively, own more than 9.8% of the aggregate of our outstanding common shares, by value or by number of shares, whichever is more restrictive, or 9.8% of the aggregate of the outstanding preferred shares of any class or series, by value or by number of shares, whichever is more restrictive.
Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities Our common shares are traded on the New York Stock Exchange ("NYSE") under the symbol "RLJ." During the year ended December 31, 2024, we paid a cash dividend of $0.10 per common share in each of the first and second quarters of 2024 and a cash dividend of $0.15 per common share in each of the third and fourth quarters of 2024.
Item 5. Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities Our common shares are traded on the New York Stock Exchange ("NYSE") under the symbol "RLJ." During the year ended December 31, 2025, we paid a cash dividend of $0.15 per common share in each quarter of 2025.
On December 31, 2024 and February 19, 2025, the closing price of our common shares as reported on the NYSE was $10.21 and $9.60, respectively. 29 Share Return Performance The graph and the table set forth below assume $100.00 was invested on December 31, 2019 in RLJ Lodging Trust's common shares.
On December 31, 2025 and February 20, 2026, the closing price of our common shares as reported on the NYSE was $7.45 and $8.22, respectively. Share Return Performance The graph and the table set forth below assume $100.00 was invested on December 31, 2020 in RLJ Lodging Trust's common shares.
Shareholder Information At February 19, 2025, we had 170 holders of record of our common shares. However, because many of our common shares are held by brokers and other institutions on behalf of shareholders, we believe there are substantially more beneficial holders of our common shares than holders of record.
However, because many of our common shares are held by brokers and other institutions on behalf of shareholders, we believe there are substantially more beneficial holders of our common shares than holders of record. At February 20, 2026, there were 12 holders (other than our company) of our OP units.
At February 19, 2025, there were 12 holders (other than our company) of our OP units. Our OP units are redeemable for cash or, at our election, for our common shares.
Our OP units are redeemable for cash or, at our election, for our common shares.
Name Initial Investment at December 31, 2019 Value of Initial Investment at December 31, 2020 Value of Initial Investment at December 31, 2021 Value of Initial Investment at December 31, 2022 Value of Initial Investment at December 31, 2023 Value of Initial Investment at December 31, 2024 RLJ Lodging Trust $ 100.00 $ 80.19 $ 79.15 $ 60.86 $ 69.69 $ 63.80 S&P 500 Index $ 100.00 $ 118.40 $ 152.39 $ 124.79 $ 157.59 $ 197.02 Dow Jones US REIT Hotels Index $ 100.00 $ 74.09 $ 85.25 $ 72.15 $ 89.79 $ 85.80 This performance graph shall not be deemed to be "filed" for the purposes of Section 18 of the Exchange Act, or incorporated by reference into any filing by us under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Name Initial Investment at December 31, 2020 Value of Initial Investment at December 31, 2021 Value of Initial Investment at December 31, 2022 Value of Initial Investment at December 31, 2023 Value of Initial Investment at December 31, 2024 Value of Initial Investment at December 31, 2025 RLJ Lodging Trust $ 100.00 $ 98.71 $ 75.90 $ 86.91 $ 79.57 $ 62.88 S&P 500 Index $ 100.00 $ 128.71 $ 105.40 $ 133.10 $ 166.40 $ 196.16 Dow Jones US REIT Hotels Index $ 100.00 $ 115.06 $ 97.38 $ 121.20 $ 115.82 $ 109.44 This performance graph shall not be deemed to be "filed" for the purposes of Section 18 of the Exchange Act, or incorporated by reference into any filing by us under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing. 30 Shareholder Information At February 20, 2026, we had 172 holders of record of our common shares.
Removed
Unregistered Sales of Equity Securities The Company did not sell any securities during the fiscal year ended December 31, 2024 that were not registered under the Securities Act.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

56 edited+10 added−8 removed52 unchanged
Biggest changeComparison of the year ended December 31, 2024 to the year ended December 31, 2023 For the year ended December 31, 2024 2023 $ Change (amounts in thousands) Revenues Operating revenues Room revenue $ 1,121,586 $ 1,095,028 $ 26,558 Food and beverage revenue 153,108 141,625 11,483 Other revenue 94,746 88,924 5,822 Total revenues 1,369,440 1,325,577 43,863 Expenses Operating expenses Room expense 288,567 277,058 11,509 Food and beverage expense 117,766 109,707 8,059 Management and franchise fee expense 107,978 107,417 561 Other operating expenses 363,631 340,485 23,146 Total property operating expenses 877,942 834,667 43,275 Depreciation and amortization 179,431 179,103 328 Property tax, insurance and other 107,043 100,229 6,814 General and administrative 54,804 58,998 (4,194) Transaction costs 320 223 97 Total operating expenses 1,219,540 1,173,220 46,320 Other income, net 5,342 4,364 978 Interest income 17,314 19,743 (2,429) Interest expense (111,358) (98,807) (12,551) Gain (loss) on sale of hotel properties, net 8,262 (34) 8,296 Loss on extinguishment of indebtedness, net (129) (169) 40 Income before equity in income from unconsolidated joint ventures 69,331 77,454 (8,123) Equity in income from unconsolidated joint ventures 459 419 40 Income before income tax expense 69,790 77,873 (8,083) Income tax expense (1,599) (1,256) (343) Net income 68,191 76,617 (8,426) Net loss (income) attributable to noncontrolling interests: Noncontrolling interest in consolidated joint ventures 45 35 10 Noncontrolling interest in the Operating Partnership (215) (247) 32 Net income attributable to RLJ 68,021 76,405 (8,384) Preferred dividends (25,115) (25,115) — Net income attributable to common shareholders $ 42,906 $ 51,290 $ (8,384) 35 Revenues Total revenues increased $43.9 million to $1.4 billion for the year ended December 31, 2024, from $1.3 billion for the year ended December 31, 2023.
Biggest changeFor similar operating and financial data and discussion of our results for the year ended December 31, 2024 compared to our results for the year ended December 31, 2023, refer to Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under Part II of our annual report on Form 10-K for the year ended December 31, 2024 , which was filed with the SEC on February 26, 2025 and is incorporated herein by reference. 35 Comparison of the year ended December 31, 2025 to the year ended December 31, 2024 For the year ended December 31, 2025 2024 $ Change (amounts in thousands) Revenues Operating revenues Room revenue $ 1,093,265 $ 1,121,586 $ (28,321) Food and beverage revenue 158,218 153,108 5,110 Other revenue 98,377 94,746 3,631 Total revenues 1,349,860 1,369,440 (19,580) Expenses Operating expenses Room expense 293,405 288,567 4,838 Food and beverage expense 119,799 117,766 2,033 Management and franchise fee expense 102,757 107,978 (5,221) Other operating expenses 371,558 363,631 7,927 Total property operating expenses 887,519 877,942 9,577 Depreciation and amortization 186,356 179,431 6,925 Property tax, insurance and other 101,315 107,043 (5,728) General and administrative 47,644 54,804 (7,160) Transaction costs 410 320 90 Total operating expenses 1,223,244 1,219,540 3,704 Other income, net 3,477 5,342 (1,865) Interest income 13,580 17,314 (3,734) Interest expense (112,298) (111,358) (940) (Loss) gain on sale of hotel properties, net (1,526) 8,262 (9,788) Loss on extinguishment of indebtedness, net (47) (129) 82 Income before equity in (loss) income from unconsolidated joint ventures 29,802 69,331 (39,529) Equity in (loss) income from unconsolidated joint ventures (100) 459 (559) Income before income tax expense 29,702 69,790 (40,088) Income tax expense (1,148) (1,599) 451 Net income 28,554 68,191 (39,637) Net (income) loss attributable to noncontrolling interests: Noncontrolling interest in consolidated joint ventures (30) 45 (75) Noncontrolling interest in the Operating Partnership (15) (215) 200 Net income attributable to RLJ 28,509 68,021 (39,512) Preferred dividends (25,115) (25,115) — Net income attributable to common shareholders $ 3,394 $ 42,906 $ (39,512) 36 Revenues Total revenues decreased $19.6 million to $1,349.9 million for the year ended December 31, 2025, from $1,369.4 million for the year ended December 31, 2024.
The determination of fair value is subjective and is based in part on assumptions and estimates that could differ materially from actual results in future periods.
The determination of fair value is subjective and is based in part on assumptions and estimates that could differ materially from actual results in future periods.
We determine the fair value by using market data and independent appraisals available to us and making numerous estimates and assumptions, such as estimates of future income growth, replacement cost per unit, value per acre or buildable square foot, capitalization rates, discount rates, borrowing rates, market rental rates, capital expenditures and cash flow projections at the respective hotel properties.
We determine the fair value by using 43 market data and independent appraisals available to us and making numerous estimates and assumptions, such as estimates of future income growth, replacement cost per unit, value per acre or buildable square foot, capitalization rates, discount rates, borrowing rates, market rental rates, capital expenditures and cash flow projections at the respective hotel properties.
These key indicators include financial information that is prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") as well as other financial measures that are non-GAAP measures. In addition, we use other information that may not be financial in nature, including industry standard statistical information and comparative data.
These key indicators include financial information that is prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") as well as other financial measures that are non-GAAP measures. In addition, we 32 use other information that may not be financial in nature, including industry standard statistical information and comparative data.
An incentive management fee is typically paid when the hotel's operating income exceeds certain 33 thresholds, and it is generally calculated as a percentage of hotel operating income after we have received a priority return on our investment in the hotel.
An incentive management fee is typically paid when the hotel's operating income exceeds certain thresholds, and it is generally calculated as a percentage of hotel operating income after we have received a priority return on our investment in the hotel.
In addition, our ADR, Occupancy and RevPAR performance are dependent on the continued success of the Marriott, Hilton and Hyatt hotel brands. • Revenues — Substantially all of our revenues are derived from the operation of hotels. Specifically, our revenues are comprised of: ◦ Room revenue — Occupancy and ADR are the major drivers of room revenue.
In addition, our ADR, Occupancy and RevPAR performance are dependent on the continued success of the Marriott, Hilton and Hyatt hotel brands. • Revenues — Substantially all of our revenues are derived from the operation of hotels. Specifically, our revenues are comprised of: 33 ◦ Room revenue — Occupancy and ADR are the major drivers of room revenue.
Cash flows from Investing Activities The net cash flow used in investing activities totaled $275.7 million for the year ended December 31, 2024 primarily due to a $122.8 million acquisition of a fee simple interest in our Wyndham Boston Beacon Hill hotel property, a $35.9 million acquisition of a hotel property, and $136.5 million in capital improvements and additions to our hotel properties and other assets.
The net cash flow used in investing activities totaled $275.7 million for the year ended December 31, 2024 primarily due to a $122.8 million acquisition of a fee simple interest in our Wyndham Boston Beacon Hill hotel property, a $35.9 million acquisition of a hotel property, and $136.5 million in capital improvements and additions to our hotel properties and other assets.
Material Cash Requirements Our expected material cash requirements for the twelve months ending 2025 and thereafter are comprised of (i) contractually obligated expenditures; and (ii) other essential cash requirements as follows: Contractually Obligated Expenditures We are party to various contractual obligations involving commitments to make payments to third parties.
Material Cash Requirements Our expected material cash requirements for the twelve months ending 2026 and thereafter are comprised of (i) contractually obligated expenditures; and (ii) other essential cash requirements as follows: Contractually Obligated Expenditures We are party to various contractual obligations involving commitments to make payments to third parties.
The cash flows provided by operating activities generally consist of the net cash generated by our hotel operations, cash paid for corporate expenses and other working capital changes. Refer to the "Results of Operations" section for further discussion of our operating results for the years ended December 31, 2024 and 2023.
The cash flows provided by operating activities generally consist of the net cash generated by our hotel operations, cash paid for corporate expenses and other working capital changes. Refer to the "Results of Operations" section for further discussion of our operating results for the years ended December 31, 2025 and 2024.
Results of Operations At December 31, 2024 and 2023, we owned 96 and 97 hotel properties, respectively. Based on when a hotel property is acquired or sold, the operating results for certain hotel properties are not comparable for the years ended December 31, 2024 and 2023.
Results of Operations At December 31, 2025 and 2024, we owned 93 and 96 hotel properties, respectively. Based on when a hotel property is acquired or sold, the operating results for certain hotel properties are not comparable for the years ended December 31, 2025 and 2024.
(2) Represents expenses related to the brand conversions of certain hotel properties prior to opening. (3) Represents expenses and income outside of the normal course of operations. Liquidity and Capital Resources As of December 31, 2024, we had $433.3 million of cash, cash equivalents, and restricted cash reserves as compared to $555.3 million at December 31, 2023.
(2) Represents expenses related to the brand conversions of certain hotel properties prior to opening. (3) Represents expenses and income outside of the normal course of operations. Liquidity and Capital Resources As of December 31, 2025, we had $442.1 million of cash, cash equivalents, and restricted cash reserves as compared to $433.3 million at December 31, 2024.
Room revenue comprised approximately 81.9% of our total revenues for the year ended December 31, 2024, and it is dictated by demand (as measured by Occupancy), pricing (as measured by ADR) and our available supply of hotel rooms.
Room revenue comprised approximately 81.0% of our total revenues for the year ended December 31, 2025, and it is dictated by demand (as measured by Occupancy), pricing (as measured by ADR) and our available supply of hotel rooms.
Inflation could also have an adverse effect on consumer spending, which could impact Occupancy levels at our hotel properties and, in turn, our own results of operations. 2024 Significant Activities Our significant activities reflect our commitment to creating long-term shareholder value through enhancing our hotel portfolio's quality, recycling capital and maintaining a prudent capital structure.
Inflation could also have an adverse effect on consumer spending, which could impact demand at our hotel properties and, in turn, our results of operations. 2025 Significant Activities Our significant activities reflect our commitment to creating long-term shareholder value through enhancing our hotel portfolio's quality, recycling capital and maintaining a prudent capital structure.
Principal Factors Affecting Our Results of Operations The principal factors affecting our operating results include the overall demand for lodging compared to the supply of available hotel rooms and other lodging options, and the ability of our independent managers to increase or maintain revenues while controlling expenses. • Demand — The demand for lodging, especially business travel, generally fluctuates with the overall economy.
Principal Factors Affecting Our Results of Operations The principal factors affecting our operating results include the overall demand for lodging compared to the supply of available hotel rooms and other lodging options, and the ability of our independent managers to increase or maintain revenues while controlling expenses. • Demand — The overall demand for lodging generally fluctuates with economic performance.
Our Customers The majority of our hotels consist of premium-branded, focused-service and compact full-service hotels. As a result of this property profile, the majority of our customers are transient in nature. Transient business typically represents individual business or leisure travelers. The majority of our hotels are located in business districts within major metropolitan areas.
Our Customers The majority of our hotels consist of premium-branded, focused-service and compact full-service hotels. As a result of this property profile, the majority of our customers are transient in nature. Transient business typically represents individual business or leisure travelers.
We expect that our ADR, Occupancy and RevPAR performance will be impacted by macroeconomic factors such as regional and local employment growth, government spending, personal income and corporate earnings, office vacancy rates, business relocation decisions, airport activity, business and leisure travel demand, new hotel construction and the pricing strategies of our competitors.
We expect that our ADR, Occupancy and RevPAR performance will be impacted by macroeconomic factors and government policies such as regional and local employment growth, government spending, personal income and corporate earnings, office vacancy rates, business relocation decisions, airport activity, business and leisure travel demand, new hotel construction and the pricing strategies of our competitors, as well as any changes in inbound international travel as a result of visa policies.
Cash flows from Financing Activities The net cash flow used in financing activities totaled $131.7 million for the year ended December 31, 2024. The sources of cash included $500.0 million in borrowings on a Term Loan and $200.0 million in borrowings on our Revolver.
The net cash flow used in financing activities was partially offset by $100.0 million in borrowings on a term loan. The net cash flow used in financing activities totaled $131.7 million for the year ended December 31, 2024. The sources of cash included $500.0 million in borrowings on a term loan and $200.0 million in borrowings on our Revolver.
(2) Includes our ownership interest in the depreciation and amortization expense of the unconsolidated joint venture. (3) Represents expenses related to the brand conversions of certain hotel properties prior to opening.
(2) Includes our ownership interest in the depreciation and amortization expense of the unconsolidated joint venture. (3) Represents expenses related to the brand conversions of certain hotel properties prior to opening. (4) Represents expenses and income outside of the normal course of operations.
Sources and Uses of Cash Cash flows from Operating Activities The net cash flow provided by operating activities totaled $285.4 million and $315.1 million for the years ended December 31, 2024 and 2023, respectively.
Sources and Uses of Cash Cash flows from Operating Activities The net cash flow provided by operating activities totaled $243.8 million and $285.4 million for the years ended December 31, 2025 and 2024, respectively.
As of December 31, 2024, we had approximately $2.2 billion in debt outstanding with a weighted average interest rate of 4.58%, of which $181.0 million is scheduled to become due in the succeeding 12 months, excluding extension options.
As of December 31, 2025, we had approximately $2.2 billion in debt outstanding with a weighted average interest rate of 4.56%, of which $879.8 million is scheduled to become due in the succeeding 12 months, excluding extension options.
Extended-stay customers are generally defined as those staying five nights or longer. Key Indicators of Operating Performance We use a variety of operating, financial and other information to evaluate the operating performance of our business.
A number of our hotel properties are affiliated with brands marketed toward extended-stay customers. Extended-stay customers are generally defined as those staying five nights or longer. Key Indicators of Operating Performance We use a variety of operating, financial and other information to evaluate the operating performance of our business.
As of December 31, 2024, approximately $23.5 million was held in FF&E reserve accounts for future capital expenditures.
As of December 31, 2025, approximately $31.9 million was held in FF&E reserve accounts for future capital expenditures.
In addition, we had $500.0 million available on our Revolver at December 31, 2024.
In addition, we had $600.0 million available on our Revolver at December 31, 2025.
Our principal sources 39 of capital for the year ended December 31, 2024 were cash generated from operations, the sales of two hotel properties, and borrowings under our Revolver and on a new Term Loan.
Our principal sources of capital for the year ended December 31, 2025 were cash generated from operations, the sales of three hotel properties, and borrowings on a term loan.
(4) Represents expenses and income outside of the normal course of operations. 38 EBITDA and EBITDA re EBITDA is defined as net income or loss excluding: (1) interest expense; (2) provision for income taxes, including income taxes applicable to sales of assets; and (3) depreciation and amortization expense.
EBITDA and EBITDA re EBITDA is defined as net income or loss excluding: (1) interest expense; (2) provision for income taxes, including income taxes applicable to sales of assets; and (3) depreciation and amortization expense.
FFO, Adjusted FFO, EBITDA, EBITDA re, and Adjusted EBITDA, as calculated by us, may not be comparable to FFO, Adjusted FFO, EBITDA, EBITDA re and Adjusted EBITDA as reported by other companies that do not define such terms exactly as we define such terms. 37 Funds From Operations We calculate FFO in accordance with standards established by the National Association of Real Estate Investment Trusts ("NAREIT"), which defines FFO as net income or loss, excluding gains or losses from sales of real estate, impairment, the cumulative effect of changes in accounting principles, plus depreciation and amortization, and adjustments for unconsolidated partnerships and joint ventures.
Funds From Operations We calculate FFO in accordance with standards established by the National Association of Real Estate Investment Trusts ("NAREIT"), which defines FFO as net income or loss, excluding gains or losses from sales of real estate, impairment, the cumulative effect of changes in accounting principles, plus depreciation and amortization, and adjustments for unconsolidated partnerships and joint ventures.
The increase in other revenue was primarily due to an increase in parking and resort fees. Property Operating Expenses Property operating expenses increased $43.3 million to $877.9 million for the year ended December 31, 2024, from $834.7 million for the year ended December 31, 2023.
The increase in other revenue was primarily due to an increase in gift shop sales, parking and resort fees. Property Operating Expenses Property operating expenses increased $9.6 million to $887.5 million for the year ended December 31, 2025, from $877.9 million for the year ended December 31, 2024.
As of December 31, 2024, our total future minimum lease payments were $580.1 million, of which $9.7 million is scheduled to become due in the succeeding 12 months.
As of December 31, 2025, our total future minimum lease payments were $570.4 million, of which $10.2 million is scheduled to become due in the succeeding 12 months.
The uses of cash included $400.0 million in repayment of a Term Loan, $200.0 million in repayment of a maturing mortgage loan, $100.0 million in repayment of our Revolver, $22.0 million paid to repurchase common shares under our share repurchase programs, $95.3 million in distributions to shareholders and unitholders, $9.0 million paid to repurchase common shares to satisfy employee tax withholding requirements, and $5.4 million in deferred financing cost payments.
The uses of cash included $400.0 million in repayment of a term loan, $200.0 million in repayment of a maturing mortgage loan, $100.0 million in repayment of our Revolver, $22.0 million paid to repurchase common shares under our share repurchase programs, $95.3 million in distributions to shareholders and unitholders, $9.0 million paid to repurchase common shares to satisfy employee tax withholding requirements, and $5.4 million in deferred financing cost payments. 42 Capital Expenditures and Reserve Funds We maintain each of our hotel properties in good repair and condition and in conformity with applicable laws and regulations, franchise agreements and management agreements.
The components of our interest expense for the years ended December 31, 2024 and 2023 were as follows (in thousands): For the year ended December 31, 2024 2023 $ Change Senior Notes $ 38,764 $ 38,764 $ — Revolver and Term Loans 50,928 31,000 19,928 Mortgage loans 13,451 21,014 (7,563) Amortization of deferred financing costs 6,623 6,100 523 Non-cash interest expense related to interest rate hedges 1,592 1,929 (337) Total interest expense $ 111,358 $ 98,807 $ 12,551 Gain (Loss) on Sale of Hotel Properties, net During the year ended December 31, 2024, we sold two hotel properties for a combined sales price of approximately $20.8 million and recorded a net gain on the sales of approximately $8.3 million.
The components of our interest expense for the years ended December 31, 2025 and 2024 were as follows (in thousands): For the year ended December 31, 2025 2024 $ Change Senior Notes $ 38,764 $ 38,764 $ — Revolver and Term Loans 54,851 50,928 3,923 Mortgage loans 10,555 13,451 (2,896) Amortization of deferred financing costs 7,551 6,623 928 Non-cash interest expense related to interest rate hedges 577 1,592 (1,015) Total interest expense $ 112,298 $ 111,358 $ 940 (Loss) Gain on Sale of Hotel Properties, net During the year ended December 31, 2025, we sold three hotel properties for a combined sales price of $73.7 million and recorded a net loss on the sales of approximately $1.5 million.
Changes in ADR typically have a greater impact on operating margins and profitability as they only have a limited effect on variable operating costs. 32 ADR, Occupancy and RevPAR are commonly used measures within the lodging industry to evaluate operating performance.
Changes in ADR typically have a greater impact on operating margins and profitability as they only have a limited effect on variable operating costs. ADR, Occupancy and RevPAR are commonly used measures within the lodging industry to evaluate operating performance. RevPAR is an important statistic for monitoring operating performance at the individual hotel property level and across our entire business.
RevPAR is an important statistic for monitoring operating performance at the individual hotel property level and across our entire business. We evaluate individual hotel RevPAR performance on an absolute basis with comparisons to budget and prior periods, as well as on a regional and company-wide basis. ADR and RevPAR include only room revenue.
We evaluate individual hotel RevPAR performance on an absolute basis with comparisons to budget and prior periods, as well as on a regional and company-wide basis. ADR and RevPAR include only room revenue.
The increase was the result of a $25.6 million increase in room revenue attributable to the comparable properties and was primarily due to an increase in corporate and group travel.
The decrease was the result of a $21.6 million decrease in room revenue attributable to the comparable properties and a $6.7 million decrease in room revenue attributable to the non-comparable properties. The decrease in room revenue from the comparable properties was primarily due to a decrease in international, government, corporate and group travel.
Other Essential Cash Requirements Our other short-term cash requirements consist primarily of the funds necessary to pay for operating expenses and other expenditures directly associated with our hotel properties, including: • recurring maintenance and capital expenditures necessary to maintain our hotel properties in accordance with brand standards and capital expenditures required for hotel brand conversions; • distributions, including those necessary to qualify for taxation as a REIT; and • corporate and other general and administrative expenses.
For details regarding our indebtedness and lease obligations, refer to Note 7, Debt, and Note 10, Commitments and Contingencies, to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K. 41 Other Essential Cash Requirements Our other short-term cash requirements consist primarily of the funds necessary to pay for operating expenses and other expenditures directly associated with our hotel properties, including: • recurring maintenance and capital expenditures necessary to maintain our hotel properties in accordance with brand standards and capital expenditures required for hotel brand conversions; • distributions, including those necessary to qualify for taxation as a REIT; and • corporate and other general and administrative expenses.
The net cash flow used in financing activities totaled $161.5 million for the year ended December 31, 2023 primarily due to $76.0 million paid to repurchase common shares under our share repurchase programs, $74.5 million in distributions to shareholders and unitholders, $4.4 million paid to repurchase common shares to satisfy employee tax withholding requirements, and $7.9 million in deferred financing cost payments.
Cash flows from Financing Activities The net cash flow used in financing activities totaled $177.7 million for the year ended December 31, 2025 primarily due to $100.0 million in repayment of our Revolver, $26.3 million in repayment of a mortgage loan, $28.6 million paid to repurchase common shares under our share repurchase programs, $116.9 million in distributions to shareholders and unitholders, $3.6 million paid to repurchase common shares to satisfy employee tax withholding requirements, and $2.2 million in deferred financing cost payments.
The following are the key hotel operating statistics for the comparable properties: For the year ended December 31, 2024 2023 Occupancy 72.6 % 71.8 % ADR $ 199.22 $ 197.48 RevPAR $ 144.66 $ 141.83 Food and Beverage Revenue Food and beverage revenue increased $11.5 million to $153.1 million for the year ended December 31, 2024, from $141.6 million for the year ended December 31, 2023.
The following are the key hotel operating statistics for the comparable properties: For the year ended December 31, 2025 2024 Occupancy 71.6 % 72.7 % ADR $ 200.22 $ 200.88 RevPAR $ 143.43 $ 145.99 Food and Beverage Revenue Food and beverage revenue increased $5.1 million to $158.2 million for the year ended December 31, 2025, from $153.1 million for the year ended December 31, 2024.
We evaluate our estimates, assumptions and judgments on an ongoing basis, based on information that is available to us, our business and industry experience, and various other matters that we believe are reasonable and appropriate for consideration under the circumstances. 41 Impairment We assess the carrying value of our investments in hotel properties whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable.
We evaluate our estimates, assumptions and judgments on an ongoing basis, based on information that is available to us, our business and industry experience, and various other matters that we believe are reasonable and appropriate for consideration under the circumstances.
Routine capital expenditures may be administered by the property management companies. However, we have approval rights over the capital expenditures as part of the annual budget process for each of our hotel properties.
The cost of routine improvements and alterations are paid out of FF&E reserves, which are funded by a portion of each hotel property’s gross revenues. Routine capital expenditures may be administered by the property management companies. However, we have approval rights over the capital expenditures as part of the annual budget process for each of our hotel properties.
The increase was due to a $41.0 million increase in property operating expenses attributable to the comparable properties and a $2.3 million increase in property operating expenses attributable to the non-comparable properties.
The increase was due to a $14.9 million increase in property operating expenses attributable to the comparable properties offset by a $5.3 million decrease in property operating expenses attributable to the non-comparable properties.
The increase was primarily attributable to an increase in COVID-19 relief awards during the year ended December 31, 2024. Interest Income Interest income decreased $2.4 million to $17.3 million for the year ended December 31, 2024, from $19.7 million for the year ended December 31, 2023.
The decrease was primarily attributable to the receipt of certain one-time COVID-19 relief awards during the year ended December 31, 2024. Interest Income Interest income decreased $3.7 million to $13.6 million for the year ended December 31, 2025, from $17.3 million for the year ended December 31, 2024.
Our principal uses of capital for the year ended December 31, 2024 were our acquisition of a fee simple interest in our Wyndham Boston Beacon Hill hotel property, the purchase of a hotel property, capital improvements and additions to hotel properties, repayment of a portion of our Revolver, repayments of a Term Loan and a mortgage loan, the repurchase of common shares under our share repurchase programs, and distributions on common and preferred shares.
Our principal uses of capital for the year ended December 31, 2025 were capital improvements and additions to hotel properties, repayment of the full outstanding balance on our Revolver, paydown of a mortgage loan, the repurchase of common shares under our share repurchase programs, and distributions on common and preferred shares.
Focused-service and compact full-service hotels typically generate most of their revenue from room rentals, have limited food and beverage outlets and meeting space and require fewer employees than traditional full-service hotels.
We believe that our investment strategy allows us to generate high levels of RevPAR, strong operating margins and attractive returns. Our focused-service and compact full-service hotels typically generate most of their revenue from room rentals, have limited food and beverage outlets and meeting space, and require fewer employees than traditional full-service hotels.
The increase was a result of a $26.6 million increase in room revenue, an $11.5 million increase in food and beverage revenue, and a $5.8 million increase in other revenue. Room Revenue Room revenue increased $26.6 million to $1.1 billion for the year ended December 31, 2024, from $1.1 billion for the year ended December 31, 2023.
The decrease was the result of a $28.3 million decrease in room revenue, offset by a $5.1 million increase in food and beverage revenue, and a $3.6 million increase in other revenue. Room Revenue Room revenue decreased $28.3 million to $1,093.3 million for the year ended December 31, 2025, from $1,121.6 million for the year ended December 31, 2024.
The decrease was primarily attributable to a decrease in non-cash compensation expense related to certain share-based awards granted during 2021 that became fully vested during the second quarter of 2024. Other Income, net Other income, net increased $1.0 million to $5.3 million for the year ended December 31, 2024, from $4.4 million for the year ended December 31, 2023.
In addition, there were certain share-based awards granted during 2021 that became fully vested during the second quarter of 2024. Other Income, net Other income, net decreased $1.9 million to $3.5 million for the year ended December 31, 2025, from $5.3 million for the year ended December 31, 2024.
The following table is a reconciliation of our GAAP net income to FFO attributable to common shareholders and unitholders and Adjusted FFO attributable to common shareholders and unitholders for the years ended December 31, 2024 and 2023 (in thousands): For the year ended December 31, 2024 2023 Net income $ 68,191 $ 76,617 Preferred dividends (25,115) (25,115) Depreciation and amortization 179,431 179,103 (Gain) loss on sale of hotel properties, net (8,262) 34 Noncontrolling interest in consolidated joint ventures 45 35 Adjustments related to consolidated joint venture (1) (187) (175) Adjustments related to unconsolidated joint venture (2) 912 941 FFO 215,015 231,440 Transaction costs 320 223 Pre-opening costs (3) 1,335 1,351 Loss on extinguishment of indebtedness, net 129 169 Amortization of share-based compensation 20,804 24,285 Non-cash income tax expense (benefit) 10 (5) Non-cash interest expense related to discontinued interest rate hedges 1,592 1,929 Other expenses (4) 2,641 996 Adjusted FFO $ 241,846 $ 260,388 (1) Includes depreciation and amortization expense allocated to the noncontrolling interest in the consolidated joint venture.
We believe that Adjusted FFO provides useful supplemental information to investors regarding our ongoing operating performance that, when considered with net income and FFO, is beneficial to an investor’s understanding of our operating performance. 39 The following table is a reconciliation of our GAAP net income to FFO attributable to common shareholders and unitholders and Adjusted FFO attributable to common shareholders and unitholders for the years ended December 31, 2025 and 2024 (in thousands): For the year ended December 31, 2025 2024 Net income $ 28,554 $ 68,191 Preferred dividends (25,115) (25,115) Depreciation and amortization 186,356 179,431 Loss (gain) on sale of hotel properties, net 1,526 (8,262) Noncontrolling interest in consolidated joint ventures (30) 45 Adjustments related to consolidated joint venture (1) (198) (187) Adjustments related to unconsolidated joint venture (2) 934 912 FFO 192,027 215,015 Transaction costs 410 320 Pre-opening costs (3) 874 1,335 Loss on extinguishment of indebtedness, net 47 129 Amortization of share-based compensation 15,340 20,804 Non-cash income tax expense 13 10 Non-cash interest expense related to discontinued interest rate hedges 577 1,592 Other expenses (4) 130 2,641 Adjusted FFO $ 209,418 $ 241,846 (1) Includes depreciation and amortization expense allocated to the noncontrolling interest in the consolidated joint venture.
There were no hotels sold during the year ended December 31, 2023. Non-GAAP Financial Measures We consider the following non-GAAP financial measures useful to investors as key supplemental measures of our performance: (1) FFO, (2) Adjusted FFO, (3) EBITDA, (4) EBITDA re and (5) Adjusted EBITDA.
During the year ended December 31, 2024, we sold two hotel properties for a combined sales price of approximately $20.8 million and recorded a net gain on the sales of approximately $8.3 million. 38 Non-GAAP Financial Measures We consider the following non-GAAP financial measures useful to investors as key supplemental measures of our performance: (1) FFO, (2) Adjusted FFO, (3) EBITDA, (4) EBITDA re and (5) Adjusted EBITDA.
Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis should be read in conjunction with our accompanying consolidated financial statements, the related notes included thereto, and Item 1A., "Risk Factors", all of which appear elsewhere in this Annual Report on Form 10-K. 31 Overview We are a self-advised and self-administered Maryland REIT that owns primarily premium-branded, rooms-oriented, high-margin, focused-service and compact full-service hotels located within heart of demand locations.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis should be read in conjunction with our accompanying consolidated financial statements, the related notes included thereto, and Item 1A., "Risk Factors", all of which appear elsewhere in this Annual Report on Form 10-K.
The decrease was attributable to lower average cash balances, partially offset by higher interest rates. Interest Expense Interest expense increased $12.6 million to $111.4 million for the year ended December 31, 2024, from $98.8 million for the year ended December 31, 2023.
The decrease was attributable to the combination of lower interest rates and lower average cash balances in 2025. Interest Expense Interest expense increased $0.9 million to $112.3 million for the year ended December 31, 2025, from $111.4 million for the year ended December 31, 2024.
The following table is a reconciliation of our GAAP net income to EBITDA, EBITDA re and Adjusted EBITDA for the years ended December 31, 2024 and 2023 (in thousands): For the year ended December 31, 2024 2023 Net income $ 68,191 $ 76,617 Depreciation and amortization 179,431 179,103 Interest expense, net of interest income 94,044 79,064 Income tax expense 1,599 1,256 Adjustments related to unconsolidated joint venture (1) 1,390 1,374 EBITDA 344,655 337,414 (Gain) loss on sale of hotel properties, net (8,262) 34 EBITDA re 336,393 337,448 Transaction costs 320 223 Pre-opening costs (2) 1,335 1,351 Loss on extinguishment of indebtedness, net 129 169 Amortization of share-based compensation 20,804 24,285 Other expenses (3) 2,641 996 Adjusted EBITDA $ 361,622 $ 364,472 (1) Includes our ownership interest in the interest, depreciation, and amortization expense of the unconsolidated joint venture.
We believe that Adjusted EBITDA provides useful supplemental information to investors regarding our ongoing operating performance that, when considered with net income, EBITDA and EBITDA re , is beneficial to an investor’s understanding of our operating performance. 40 The following table is a reconciliation of our GAAP net income to EBITDA, EBITDA re and Adjusted EBITDA for the years ended December 31, 2025 and 2024 (in thousands): For the year ended December 31, 2025 2024 Net income $ 28,554 $ 68,191 Depreciation and amortization 186,356 179,431 Interest expense, net of interest income 98,718 94,044 Income tax expense 1,148 1,599 Adjustments related to unconsolidated joint venture (1) 1,512 1,390 EBITDA 316,288 344,655 Loss (gain) on sale of hotel properties, net 1,526 (8,262) EBITDA re 317,814 336,393 Transaction costs 410 320 Pre-opening costs (2) 874 1,335 Loss on extinguishment of indebtedness, net 47 129 Amortization of share-based compensation 15,340 20,804 Other expenses (3) 130 2,641 Adjusted EBITDA $ 334,615 $ 361,622 (1) Includes our ownership interest in the interest, depreciation, and amortization expense of the unconsolidated joint venture.
The increase was primarily attributable to increases in property tax assessments and property insurance premiums. General and Administrative General and administrative expense decreased $4.2 million to $54.8 million for the year ended December 31, 2024, from $59.0 million for the year ended December 31, 2023.
The decrease was primarily attributable to a decrease in property insurance premiums and a decrease in real estate tax expense including the beneficial impact of successful real estate tax appeals. General and Administrative General and administrative expense decreased $7.2 million to $47.6 million for the year ended December 31, 2025, from $54.8 million for the year ended December 31, 2024.
The net cash flow used in investing activities was partially offset by $19.5 million in proceeds from the sales of two hotel properties. 40 The net cash flow used in investing activities totaled $134.7 million for the year ended December 31, 2023 primarily due to $132.3 million in capital improvements and additions to our hotel properties and other assets and a purchase deposit of $2.4 million.
Cash flows from Investing Activities The net cash flow used in investing activities totaled $57.4 million for the year ended December 31, 2025 primarily due to $126.4 million in capital improvements and additions to our hotel properties and other assets.
Group business may or may not use the meeting space at any given hotel. Given the limited meeting space at the majority of our hotels, group business that utilizes meeting space represents a small component of our customer base. A number of our hotel properties are affiliated with brands marketed toward extended-stay customers.
Group business is typically defined as a minimum of 10 guestrooms booked together as part of the same piece of business. Group business may or may not use the meeting space at any given hotel. Given the limited meeting space at the majority of our hotels, group business that utilizes meeting space represents a small component of our customer base.
During the year ended December 31, 2024, the following significant activities took place: • Acquired a fee simple interest in the land at our Wyndham Boston Beacon Hill hotel property for approximately $125.0 million. • Exercised one-year extension options on $181.0 million in mortgage loans to extend the maturities to April 2025. • Fully repaid a $200.0 million maturing mortgage loan with a $200.0 million draw on our Revolver. • Approved the 2024 Share Repurchase Program to acquire up to an aggregate of $250.0 million of common and preferred shares from May 9, 2024 to May 8, 2025. • Sold two hotel properties for a combined sales price of approximately $20.8 million. • Acquired the 110-room Hotel Teatro in Denver, Colorado for $35.5 million. • Entered into a new $500.0 million Term Loan, the proceeds of which were used to repay our $400.0 million Term Loan maturing in 2025 and $100.0 million of borrowings under our Revolver. • Repurchased and retired approximately 2.3 million common shares for approximately $22.0 million.
During the year ended December 31, 2025, the following significant activities took place: 34 • Sold three hotel properties for a combined sales price of $73.7 million. • Refinanced a term loan to increase the loan amount to $300.0 million and extend the initial maturity to April 2028. • Paid off the $100.0 million outstanding balance on our Revolver using the incremental $100.0 million in proceeds from the refinanced term loan. • Exercised the final one-year extension options on $181.0 million in mortgage loans to extend the maturities to April 2026. • Approved the 2025 Share Repurchase Program to acquire up to an aggregate of $250.0 million of common and preferred shares from May 9, 2025 to May 8, 2026. • Repurchased and retired approximately 3.3 million common shares for approximately $28.6 million. • Entered into $225.0 million in interest rate swaps as a $150.0 million interest rate swap expired.
Our hotels are concentrated in markets that we believe exhibit multiple demand generators and attractive long-term growth prospects. We believe premium-branded, focused-service and compact full-service hotels with these characteristics generate high levels of RevPAR, strong operating margins and attractive returns.
Overview We are a self-advised and self-administered Maryland REIT that owns primarily premium-branded, rooms-oriented, high-margin, focused-service and compact full-service hotels located within heart of demand locations. We own a geographically diversified portfolio of hotels located in urban markets that exhibit multiple demand generators and attractive long-term growth prospects.
The components of our property operating expenses for the comparable properties were as follows (in thousands): For the year ended December 31, 2024 2023 $ Change Room expense $ 286,586 $ 275,308 $ 11,278 Food and beverage expense 116,840 109,707 7,133 Management and franchise fee expense 107,332 106,585 747 Other operating expenses 360,250 338,420 21,830 Total property operating expenses $ 871,008 $ 830,020 $ 40,988 The increase in property operating expenses attributable to the comparable properties was primarily due to increases in wages and benefits, as well as increases in room and food and beverage expenses, and increases in other operating expenses, primarily due to increases in sales and marketing, utilities, and administrative expenses. 36 Property Tax, Insurance and Other Property tax, insurance and other expense increased $6.8 million to $107.0 million for the year ended December 31, 2024, from $100.2 million for the year ended December 31, 2023.
The components of our property operating expenses for the comparable properties were as follows (in thousands): For the year ended December 31, 2025 2024 $ Change Room expense $ 288,303 $ 281,533 $ 6,770 Food and beverage expense 117,332 115,489 1,843 Management and franchise fee expense 100,667 104,797 (4,130) Other operating expenses 363,477 353,078 10,399 Total property operating expenses $ 869,779 $ 854,897 $ 14,882 The increase in property operating expenses attributable to the comparable properties was primarily due to increases in wages and benefits, as well as increases in room expenses and food expenses and increases in other operating expenses, including increases in sales and marketing expenses, utilities and general liability insurance coverage.
The increase in food and beverage revenue was primarily due to increases in outlet revenue and banquet and catering revenue.
The increase in food and beverage revenue was primarily due to increases in banquet and outlet revenue and the ramping up of our recently converted and renovated hotels. Other Revenue Other revenue increased $3.6 million to $98.4 million for the year ended December 31, 2025, from $94.7 million for the year ended December 31, 2024.
Removed
Accordingly, business travelers represent the majority of the transient demand at our hotels. As a result, macroeconomic factors impacting business travel have a greater effect on our business than factors impacting leisure travel. Group business is typically defined as a minimum of 10 guestrooms booked together as part of the same piece of business.
Added
The majority of our hotels are located in business districts within major metropolitan areas which benefit from a wide range of demand sources, including corporate, educational, government, leisure and international, among others. As a result, macroeconomic or political actions that impact these areas may have a significant effect on our business.
Removed
The non-comparable properties include two hotel properties that were sold and one hotel property that was acquired in 2024. 34 For similar operating and financial data and discussion of our results for the year ended December 31, 2023 compared to our results for the year ended December 31, 2022, refer to Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under Part II of our annual report on Form 10-K for the year ended December 31, 2023 , which was filed with the SEC on February 27, 2024 and is incorporated herein by reference.
Added
Additionally, proposed or enacted tariffs on imported goods, including construction materials, furniture, and equipment, may further exacerbate inflationary pressures on renovation costs and limit the availability of certain supplies, thereby increasing the cost and/or delaying the timing of planned capital projects.
Removed
Other Revenue Other revenue, which includes revenue derived from ancillary sources such as parking fees, resort fees, gift shop sales and other guest service fees, increased $5.8 million to $94.7 million for the year ended December 31, 2024, from $88.9 million for the year ended December 31, 2023.
Added
The non-comparable properties include five hotel properties that were sold in 2025 and 2024 and one hotel property that was acquired in 2024.
Removed
The increase was attributable to higher base interest rates on our unhedged variable rate debt combined with an increase in the amount of our debt that was unhedged.
Added
This was offset by a decrease in management and franchise fee expense, which was due to lower revenues as well as recently amended management and franchise agreements. 37 Depreciation and Amortization Depreciation and amortization expense increased $6.9 million to $186.4 million for the year ended December 31, 2025, from $179.4 million for the year ended December 31, 2024.
Removed
We believe that Adjusted FFO provides useful supplemental information to investors regarding our ongoing operating performance that, when considered with net income and FFO, is beneficial to an investor’s understanding of our operating performance.
Added
The increase was primarily related to our recently renovated hotels. Property Tax, Insurance and Other Property tax, insurance and other expense decreased $5.7 million to $101.3 million for the year ended December 31, 2025, from $107.0 million for the year ended December 31, 2024.
Removed
We believe that Adjusted EBITDA provides useful supplemental information to investors regarding our ongoing operating performance that, when considered with net income, EBITDA and EBITDA re , is beneficial to an investor’s understanding of our operating performance.
Added
The decrease was primarily attributable to a decrease in non-cash compensation expense, including the impact of a $1.6 million benefit as a result of the performance unit forfeitures related to the departure of Company executives during the year ended December 31, 2025.
Removed
For details regarding our indebtedness and lease obligations, refer to Note 7, Debt, and Note 10, Commitments and Contingencies, to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Added
FFO, Adjusted FFO, EBITDA, EBITDA re, and Adjusted EBITDA, as calculated by us, may not be comparable to FFO, Adjusted FFO, EBITDA, EBITDA re and Adjusted EBITDA as reported by other companies that do not define such terms exactly as we define such terms.
Removed
Capital Expenditures and Reserve Funds We maintain each of our hotel properties in good repair and condition and in conformity with applicable laws and regulations, franchise agreements and management agreements. The cost of routine improvements and alterations are paid out of FF&E reserves, which are funded by a portion of each hotel property’s gross revenues.
Added
The net cash flow used in investing activities was partially offset by $69.0 million in net proceeds from the sales of three hotel properties.
Added
The net cash flow used in investing activities was partially offset by $19.5 million in net proceeds from the sales of two hotel properties.
Added
Impairment We assess the carrying value of our investments in hotel properties whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

7 edited+6 added−0 removed5 unchanged
Biggest changeFor debt obligations outstanding as of December 31, 2024, the following table presents the principal repayments and related weighted-average interest rates by contractual maturity dates, excluding extension options (in thousands): 2025 2026 2027 2028 2029 Thereafter Total Fixed rate debt (1)(2) $ — $ 500,000 $ — $ — $ 525,000 $ — $ 1,025,000 Weighted-average interest rate —% 3.75% —% —% 4.05% —% 3.90% Variable rate debt (1) $ 181,000 $ 425,000 $ 600,000 $ — $ — $ — $ 1,206,000 Weighted-average interest rate (3) 4.70% 5.66% 4.92% —% —% —% 5.15% Total $ 181,000 $ 925,000 $ 600,000 $ — $ 525,000 $ — $ 2,231,000 (1) Excludes $6.0 million, $6.3 million and $0.1 million of net deferred financing costs on the senior notes, Term Loans and mortgage loans, respectively.
Biggest changeFor debt obligations outstanding as of December 31, 2025, the following table presents the principal repayments and related weighted-average interest rates by contractual maturity dates, excluding extension options (in thousands): 2026 2027 2028 2029 2030 Thereafter Total Fixed rate debt (1)(2)(3) $ 500,000 $ — $ — $ 525,000 $ — $ — $ 1,025,000 Weighted-average interest rate 3.75% —% —% 4.05% —% —% 3.90% Variable rate debt (1)(3) $ 379,750 $ 500,000 $ 300,000 $ — $ — $ — $ 1,179,750 Weighted-average interest rate (4) 5.16% 4.85% 5.54% —% —% —% 5.13% Total $ 879,750 $ 500,000 $ 300,000 $ 525,000 $ — $ — $ 2,204,750 (1) Excludes $3.6 million, $4.9 million and $0.1 million of net deferred financing costs on the senior notes, Term Loans and mortgage loans, respectively.
If interest rates were to rise by 1.00%, or 100 basis points, and our fixed rate debt balance remained constant, we expect the fair value of our debt would decrease by approximately $26.8 million. Item 8. Financial Statements and Supplementary Data Refer to the Index to Financial Statements on page F-1. Item 9.
If interest rates were to rise by 1.00%, or 100 basis points, and our fixed rate debt balance remained constant, we expect the fair value of our debt would decrease by approximately $19.2 million. Item 8. Financial Statements and Supplementary Data Refer to the Index to Financial Statements on page F-1. Item 9.
After taking into consideration the effect of interest rate swaps, 69.5% of our total indebtedness was fixed or effectively fixed.
After taking into consideration the effect of interest rate swaps, 69.2% of our total indebtedness was fixed or effectively fixed.
As of December 31, 2024, we had approximately $1.2 billion of total variable rate debt outstanding (or 54.1% of total indebtedness) with a weighted-average interest rate of 5.15% per annum. Our interest rate risk objectives are to limit the impact of interest rate fluctuations on earnings and cash flows and to lower our overall borrowing costs.
As of December 31, 2025, we had approximately $1.2 billion of total variable rate debt outstanding (or 53.5% of total indebtedness) with a weighted-average interest rate of 5.13% per annum. Our interest rate risk objectives are to limit the impact of interest rate fluctuations on earnings and cash flows and to lower our overall borrowing costs.
As of December 31, 2024, the estimated fair value of our fixed rate debt was $962.2 million, which was based on having the same debt service requirements that could have been borrowed at the date presented, at prevailing current market interest rates.
As of December 31, 2025, the estimated fair value of our fixed rate debt was $994.1 44 million, which was based on having the same debt service requirements that could have been borrowed at the date presented, at prevailing current market interest rates.
(2) Excludes a $1.5 million fair value adjustment on debt. (3) The weighted-average interest rate gives effect to interest rate swaps, as applicable. Our ultimate realized gain or loss with respect to interest rate fluctuations will depend on the exposures that arise during future periods, prevailing interest rates, and our hedging strategies at that time.
(4) The weighted-average interest rate gives effect to interest rate swaps, as applicable. Our ultimate realized gain or loss with respect to interest rate fluctuations will depend on the exposures that arise during future periods, prevailing interest rates, and our hedging strategies at that time.
As of December 31, 2024, if market interest rates on our variable rate debt not subject to interest rate swaps were to increase by 1.00%, or 100 basis points, interest expense would decrease future earnings and cash flows by approximately $6.8 million annually, taking into account our existing contractual hedging arrangements. 42 The following table provides information about our financial instruments that are sensitive to changes in interest rates.
As of December 31, 2025, if market interest rates on our variable rate debt not subject to interest rate swaps were to increase by 1.00%, or 100 basis points, interest expense would decrease future earnings and cash flows by approximately $6.8 million annually, taking into account our existing contractual hedging arrangements.
Added
The following table provides information about our financial instruments that are sensitive to changes in interest rates.
Added
(2) Excludes a $1.1 million fair value adjustment on debt. (3) The principal repayments for 2026 include two mortgage loans with a combined outstanding principal balance of approximately $154.8 million as of December 31, 2025. Both of these mortgage loans were amended in January 2026.
Added
Each mortgage loan now has a maturity date of April 2029 and two one-year extension options at our discretion, subject to certain conditions. We paid down approximately $5.4 million in principal in connection with the amendments in January 2026, resulting in a new combined outstanding principal balance of $149.4 million for the two mortgage loans.
Added
One of the mortgage loans allows a future advance of up to $23.4 million by April 2026 with the addition of another hotel property previously unencumbered, with the combined outstanding principal balance of both mortgage loans not to exceed $164.4 million. The principal repayments for 2026 also include a term loan with an outstanding principal balance of $225.0 million.
Added
This term loan was refinanced in February 2026 to extend the scheduled maturity date to February 2031 and upsize it to a delayed draw term loan of $569.0 million, of which $225.0 million has been funded and $344.0 million of commitments remain available to be drawn by us.
Added
In February 2026, we also entered into a new $150.0 million delayed draw term loan which matures in February 2033. The principal repayments for 2026 also include our $500.0 million senior notes maturing in July 2026, which we intend to repay by maturity using the incremental proceeds from these transactions.

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