Revenue Performance - Total revenues decreased by $15.7 million to $330.0 million for the three months ended September 30, 2025, compared to $345.7 million for the same period in 2024[129]. - Total revenues decreased by $18.2 million to $1,021.3 million for the nine months ended September 30, 2025, compared to $1,039.5 million for the same period in 2024[143]. - Room revenue decreased by $16.2 million to $267.4 million for the three months ended September 30, 2025, primarily due to a $14.3 million decrease from comparable properties[130]. - Room revenue decreased by $22.8 million to $831.1 million for the nine months ended September 30, 2025, primarily due to a $19.0 million decrease from comparable properties[144]. Occupancy and Rates - Occupancy rate for comparable properties was 73.0% for the three months ended September 30, 2025, down from 75.4% in 2024[131]. - Occupancy rate for comparable properties was 72.6% for the nine months ended September 30, 2025, down from 73.9% in 2024[145]. - Average Daily Rate (ADR) decreased to $189.45 for the three months ended September 30, 2025, from $193.43 in 2024[131]. - Revenue per Available Room (RevPAR) decreased to $138.29 for the three months ended September 30, 2025, compared to $145.77 in 2024[131]. Expenses and Losses - Operating expenses increased by $3.3 million to $308.9 million for the three months ended September 30, 2025, from $305.6 million in 2024[128]. - Property operating expenses increased by $4.6 million to $666.5 million for the nine months ended September 30, 2025, from $661.9 million for the same period in 2024[148]. - Depreciation and amortization expense increased by $5.1 million to $139.1 million for the nine months ended September 30, 2025, primarily related to recently renovated hotels[150]. - General and administrative expense decreased by $6.3 million to $35.6 million for the nine months ended September 30, 2025, due to a decrease in non-cash compensation expense[152]. - Interest income decreased by $3.1 million to $10.1 million for the nine months ended September 30, 2025, attributed to lower interest rates and reduced cash holdings[154]. - Interest expense increased by $0.6 million to $83.7 million for the nine months ended September 30, 2025, compared to $83.2 million for the same period in 2024[155]. - Net loss attributable to common shareholders was $10.0 million for the three months ended September 30, 2025, compared to net income of $14.3 million in 2024[128]. - For the three months ended September 30, 2025, the net loss was $3.798 million compared to a net income of $20.643 million for the same period in 2024[161]. - The company recorded a net income of $28.0 million for the nine months ended September 30, 2025, a decrease of $34.7 million from $62.7 million in 2024[142]. - Funds From Operations (FFO) for the three months ended September 30, 2025, was $37.245 million, a decrease of 32% from $54.689 million in 2024[161]. - Adjusted FFO for the nine months ended September 30, 2025, was $160.684 million, down 16% from $191.634 million in 2024[161]. - EBITDA for the three months ended September 30, 2025, was $68.728 million, a decrease of 24% from $90.602 million in 2024[166]. Cash Flow and Investments - As of September 30, 2025, the company had $404.1 million in cash and cash equivalents, down from $433.3 million at December 31, 2024[168]. - Net cash flow provided by operating activities for the nine months ended September 30, 2025, was $180.9 million, a decrease from $214.4 million in 2024[170]. - The net cash flow used in investing activities for the nine months ended September 30, 2025, was $88.1 million, primarily due to $111.7 million in capital improvements[171]. - The net cash flow used in financing activities for the nine months ended September 30, 2025, totaled $122.1 million, mainly due to $100.0 million in repayment of the Revolver[173]. - Approximately $29.2 million was held in FF&E reserve accounts for future capital expenditures as of September 30, 2025[177]. Debt and Interest Rate Management - As of September 30, 2025, the company had approximately $1.2 billion of total variable rate debt outstanding, representing 54.1% of total indebtedness, with a weighted-average interest rate of 5.30% per annum[178]. - The total debt obligations as of September 30, 2025, amounted to $2.231 billion, with fixed rate debt totaling $1.025 billion and variable rate debt totaling $1.206 billion[180]. - The weighted-average interest rates for fixed rate debt are 3.90% and for variable rate debt are 5.30%[180]. - If market interest rates on variable rate debt increase by 1.00%, interest expense would decrease future earnings and cash flows by approximately $7.3 million annually[178]. - The estimated fair value of the company's fixed rate debt as of September 30, 2025, was $991.9 million, with a potential decrease of approximately $21.8 million if interest rates rise by 1.00%[182]. - The company has entered into derivative financial instruments such as interest rate swaps to mitigate interest rate risk, effectively locking the interest rate on a portion of its variable rate debt[179]. - 67.2% of the company's total indebtedness was fixed or effectively fixed after considering interest rate swaps[178]. - The company aims to limit the impact of interest rate fluctuations on earnings and cash flows while lowering overall borrowing costs[179]. - The company does not engage in derivative or interest rate transactions for speculative purposes[179]. - The principal repayments for variable rate debt include $406 million due in 2026, $500 million in 2027, and $300 million in 2028[180]. Asset Sales and Share Repurchase - The company sold one hotel property for a sales price of $24.3 million in 2025[117]. - The company sold one hotel property for $24.3 million during the nine months ended September 30, 2025, recording a net gain of $0.8 million[156]. - A new share repurchase program was approved to acquire up to $250.0 million of common and preferred shares from May 9, 2025, to May 8, 2026[117]. - The company refinanced a term loan to increase it to $300.0 million and extended the maturity to April 2028[117].

Financial Data and Key Metrics Changes - The company reported a third quarter REVPAR of $139, reflecting a 5.1% decline year-over-year, driven by a 3.1% drop in occupancy and a 2.1% decrease in ADR [16][21] - Third quarter occupancy was 73%, and average daily rate (ADR) was $190 [16] - Adjusted EBITDA for the third quarter was $72.6 million, with adjusted FFO per diluted share at $0.27 [18][21] - The company ended the quarter with $2.2 billion in debt, a weighted average maturity of three years, and an interest rate of 4.7% [19] Business Line Data and Key Metrics Changes - Urban hotels outperformed the broader portfolio, with REVPAR growth in San Francisco CBD at 19.4% due to strong demand from conferences and events [6][17] - Non-room revenues grew by 1.3% despite lower occupancy, indicating successful ROI initiatives [9][18] - Group revenues were impacted by the shift of Jewish holidays into September, leading to a softer citywide calendar [6] Market Data and Key Metrics Changes - The company noted a decline in government-related transient demand, which remained significantly below last year [6] - The leisure segment showed stable trends, with demand up 1% during the quarter, although some pricing sensitivity was observed [8][40] - Urban leisure markets continued to perform well, benefiting from strong demand for concerts and events [8] Company Strategy and Development Direction - The company is focused on capital allocation, with ongoing renovations in Waikiki, Key West, and Fort Lauderdale, which are now substantially complete [10][20] - The company is optimistic about the upcoming World Cup in the U.S. and other major events that will drive demand in key markets [14][72] - The company is committed to returning capital to shareholders while maintaining a healthy balance sheet [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about the impact of the government shutdown on travel propensity and overall market conditions [12][60] - The outlook for the fourth quarter has been adjusted to reflect current trends, with expected REVPAR growth ranging from -1.9% to -2.6% [21] - Management remains optimistic about 2026, citing favorable economic conditions and a lack of new supply in urban markets [14][74] Other Important Information - The company has significant liquidity of approximately $1 billion, including $375 million in unrestricted cash [18] - The company is leveraging its healthy balance sheet to unlock value through renovations and conversions [19][20] Q&A Session Summary Question: Can you dive into the revenue management strategies for the quarter? - Management highlighted a shift towards leisure bookings to compensate for weaker group demand, with a focus on diversifying the mix [26][28] Question: How does the top-line outlook affect your CapEx and expected returns? - Management noted that most renovations were front-loaded, and while they expect delays in ramp-up due to market conditions, they remain optimistic about future returns [32][33] Question: What is the impact of the government shutdown on Q4 guidance? - Management indicated that the government shutdown has affected overall market sentiment and travel propensity, leading to a downward adjustment in expectations for October and the fourth quarter [58][60] Question: How is the REVPAR index share evolving? - Management reported an increase in REVPAR index, reflecting strong asset quality and market positioning [83][84] Question: What are the risks to the hotel operating model in the future? - Management expressed confidence in current labor trends and productivity improvements, despite potential future risks related to immigration policy [85][88]

Core Insights - During market turbulence, investors often seek dividend-yielding stocks, which typically have high free cash flows and offer substantial dividends [1] Group 1: Company Ratings and Analyst Insights - Park Hotels & Resorts Inc (NYSE:PK) has a dividend yield of 9.91%. UBS analyst Robin Farley maintained a Neutral rating and raised the price target from $10 to $11 on October 6, 2025, with an accuracy rate of 79%. Truist Securities analyst Patrick Scholes downgraded the stock from Buy to Hold and cut the price target from $16 to $11 on May 30, 2025, with an accuracy rate of 65% [7] - RLJ Lodging Trust (NYSE:RLJ) has a dividend yield of 8.75%. Truist Securities analyst Gregory Miller maintained a Hold rating and raised the price target from $7 to $8 on September 5, 2025, with an accuracy rate of 67%. Keybanc analyst Austin Wurschmidt maintained an Overweight rating but reduced the price target from $14 to $12 on March 24, 2025, with an accuracy rate of 60% [7] - Easterly Government Properties Inc (NYSE:DEA) has a dividend yield of 8.37%. Jefferies analyst Joe Dickstein downgraded the stock from Buy to Hold and cut the price target from $26 to $20 on October 13, 2025, with an accuracy rate of 65%. RBC Capital analyst Michael Carroll maintained an Underperform rating and reduced the price target from $27.5 to $22 on June 2, 2025, with an accuracy rate of 60% [7]

Core Insights - RLJ Lodging reported quarterly funds from operations (FFO) of $0.27 per share, exceeding the Zacks Consensus Estimate of $0.26 per share, but down from $0.40 per share a year ago, indicating a FFO surprise of +3.85% [1] - The company generated revenues of $330.05 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 2.09%, although this is a decline from $345.74 million in the same quarter last year [2] - RLJ Lodging has consistently surpassed consensus FFO estimates over the last four quarters, achieving this four times [2] Financial Performance - The FFO for the previous quarter was $0.48 per share, which was higher than the expected $0.46 per share, resulting in a surprise of +4.35% [1] - The current consensus FFO estimate for the upcoming quarter is $0.32, with projected revenues of $335.3 million, and for the current fiscal year, the estimate is $1.37 on revenues of $1.35 billion [7] Market Position - RLJ Lodging shares have underperformed, losing approximately 33.4% since the beginning of the year, contrasting with the S&P 500's gain of 15.1% [3] - The Zacks Rank for RLJ Lodging is currently 4 (Sell), indicating expectations of underperformance in the near future [6] Industry Context - The REIT and Equity Trust - Other industry, to which RLJ Lodging belongs, is currently ranked in the top 34% of over 250 Zacks industries, suggesting a favorable industry outlook [8]

Group 1 - The article discusses the importance of enabling Javascript and cookies in browsers to prevent access issues [1] - It highlights that users with ad-blockers may face restrictions when trying to access content [1]

Financial Performance - Net loss attributable to common shareholders was $3.8 million, resulting in a net loss per share of $0.07[4] - Adjusted FFO per diluted common share was $0.27, a decrease of 32.5% compared to the prior year[5] - Total revenues for the third quarter were $330.0 million, down 4.5% year-over-year[4] - Adjusted EBITDA for the quarter was $72.6 million, reflecting a 21.0% decline from the previous year[5] - For the three months ended September 30, 2025, total revenues were $330,045,000, a decrease of 4.0% compared to $345,744,000 for the same period in 2024[36] - Net loss attributable to common shareholders for the three months ended September 30, 2025, was $10,015,000, compared to a net income of $14,323,000 in 2024[36] - Funds from Operations (FFO) attributable to common shareholders for the three months ended September 30, 2025, was $37,245,000, a decrease from $54,689,000 in 2024[38] - Adjusted FFO per common share for the nine months ended September 30, 2025, was $1.07, compared to $1.24 in 2024[38] - EBITDA for the nine months ended September 30, 2025, was $242.927 million, down from $268.763 million in 2024, reflecting a decrease of approximately 9.6%[42] - Adjusted EBITDA for the nine months ended September 30, 2025, was $254.185 million, compared to $280.494 million in 2024, indicating a decline of approximately 9.4%[42] Revenue and Occupancy - Comparable RevPAR decreased by 5.1% to $138.51, with a comparable occupancy rate of 73.0%, down 3.1%[5] - The updated full-year outlook projects comparable RevPAR growth between -2.6% to -1.9%[12] - The company's total revenue for the three months ended September 30, 2025, was $330.045 million, a decrease of 4.5% from $345.744 million in 2024[46] - Comparable Hotel EBITDA margin for the three months ended September 30, 2025, was 24.5%, down from 29.3% in 2024[46] Liquidity and Debt - The company has approximately $1.0 billion in total liquidity, including $375 million in unrestricted cash[9] - The company has a total consolidated debt of $2.231 billion as of September 30, 2025, with a weighted average interest rate of 4.66%[50] - Cash and cash equivalents as of September 30, 2025, were $374,827,000, down from $409,809,000 at the end of 2024[33] Capital Expenditures and Future Projections - Capital expenditures related to renovations are expected to be between $80 million and $100 million[15] - The anticipated range for Adjusted EBITDA for FY 2025 is $324.0 million to $332.0 million[12] - The company expects full-year 2025 EBITDA to be in the range of $308.8 million to $316.8 million[47] - Funds from Operations (FFO) for the year ended December 31, 2025, is projected to be between $182.5 million and $189.5 million[48] Asset Management - Total assets as of September 30, 2025, were $4,793,155,000, a decrease from $4,883,879,000 as of December 31, 2024[33] - Total liabilities as of September 30, 2025, were $2,585,106,000, slightly down from $2,585,602,000 at the end of 2024[33] - The company sold three hotels: Residence Inn Merrillville in May 2024, Fairfield Inn & Suites Denver Cherry Creek in September 2024, and Courtyard Atlanta Buckhead in March 2025[31] - The company reported a loss on the sale of hotel properties of $802,000 for the nine months ended September 30, 2025[42] Shareholder Actions - The company repurchased 0.2 million shares for approximately $1.3 million during the third quarter[8] - For the three months ended September 30, 2025, the company reported a net loss of $3.798 million compared to a net income of $20.643 million for the same period in 2024[42]

Core Insights - RLJ Lodging Trust reported a comparable RevPAR of $138.51, reflecting a decrease of 5.1% compared to the previous year [1] - The company generated total revenues of $330.0 million during the third quarter [1] - RLJ Lodging Trust experienced a net loss of $3.8 million, translating to a net loss per share of $0.07 [1] - Comparable Hotel EBITDA was reported at $80.8 million [1] - Adjusted EBITDA for the quarter stood at $72.6 million [1] - Adjusted FFO per diluted common share and unit was $0.27 [1] - The company repurchased 0.2 million shares during the quarter [1]

Core Viewpoint - The real estate sector has several oversold stocks, presenting potential buying opportunities for undervalued companies [1] Group 1: Oversold Stocks - Alexandria Real Estate Equities Inc (NYSE:ARE) has an RSI of 25.7, with a recent stock price of $74.43, down 1.1% [8] - RLJ Lodging Trust (NYSE:RLJ) has an RSI of 23.4, with a recent stock price of $6.76, down 2.5% [8] - Alexander & Baldwin Inc (NYSE:ALEX) has an RSI of 24.6, with a recent stock price of $16.88, down 0.9% [8] Group 2: Analyst Ratings and Price Targets - Cantor Fitzgerald analyst initiated coverage on Alexandria Real Estate with a Neutral rating and a price target of $88 [8] - Baird analyst downgraded RLJ Lodging from Outperform to Neutral, lowering the price target from $9 to $7.5 [8] - JMP Securities analyst reiterated Alexander & Baldwin with a Market Perform rating [8]

Group 1 - Hotel REITs are facing rapidly changing circumstances but still present investment opportunities, particularly in preferred equity [1] - The investment group European Small Cap Ideas focuses on high-quality small-cap investment opportunities in Europe, emphasizing capital gains and dividend income [1] - The group offers two model portfolios: the European Small Cap Ideas portfolio and the European REIT Portfolio, along with weekly updates and educational content [1] Group 2 - The article expresses the author's personal opinions and indicates a beneficial long position in RLJ.PR.A shares [1]

B2B Software and Tech Spending - A study by West Monroe indicates that 86% of companies report higher enterprise software costs compared to the previous year, with a similar percentage expecting further increases in the next fiscal year [1][2] - 93% of companies have noted rising enterprise software costs, with major systems like Oracle, SAP, and Salesforce increasing their prices [2] - Companies are focusing on negotiating better tech contracts and understanding the ROI of their software solutions to manage costs effectively [4] AI Investment - Nearly 25% of companies are allocating 10% or more of their IT budget to AI, with 91% expecting AI to drive further increases in tech spending [3] - Despite increased spending on AI, only 8% of companies anticipate a reduction in internal personnel costs, and 9% expect a decrease for third-party contractors [3] Economic Indicators - The Federal Reserve has lowered interest rates for the first time this year, with a near-unanimous vote to reduce rates by a quarter point to between 4% and 4.25% [6][8] - The rate cut is expected to facilitate cheaper borrowing for companies, potentially accelerating investments and reallocating funds previously spent on debt service [8][9] H-1B Visa Fee Increase - The Trump Administration has increased the annual fee for H-1B visas to $100,000 from $780, which may deter foreign talent from working in the U.S. [10][12] - The fee hike disproportionately affects Indian applicants, who made up 73% of approved H-1B visas in FY 2023 [12] Tax Reporting Changes - A provision in Congress aims to rescind a new rule requiring companies to report detailed tax information, which could impact transparency for investors and analysts [14][15] - The proposed changes may lead to a government shutdown, complicating the legislative process [17] Financial Planning and Technology - Companies are encouraged to adopt continuous financial planning processes to adapt to rapidly changing business environments [18][20] - The integration of AI in financial systems is expected to enhance decision-making capabilities and improve efficiency within organizations [25][26]