Financial Data and Key Metrics Changes - The company achieved RevPAR growth of 1.6% in Q1 2025, driven by a 2.1% increase in ADR, slightly offset by a 0.5% decline in occupancy [5][17] - First quarter occupancy was 69.1%, average daily rate was $204.31, and RevPAR was $141.23 [17] - Total revenue growth was 1.2%, benefiting from a 3.8% increase in out-of-room spend [18][20] - Adjusted EBITDA for Q1 was $77.6 million, and adjusted FFO per diluted share was $0.31 [20][22] Business Line Data and Key Metrics Changes - Group segment was the best performing, with revenue growth of 10% driven by strong citywide events [8][18] - Urban hotels achieved RevPAR growth of 3.6%, with weekday urban RevPAR growing by 4.9% [7][8] - The leisure segment saw a 2% increase in revenues, with urban leisure outperforming at 3% growth [9] Market Data and Key Metrics Changes - Strong RevPAR growth was noted in urban markets such as San Jose (14.1%), Houston CBD (9.9%), Philadelphia (26.4%), Pittsburgh (12.6%), and Louisville (10.3%) [18] - International demand remains soft, representing less than 3% of revenues, primarily in markets like New York and South Florida [13] Company Strategy and Development Direction - The company is focused on capital recycling and strengthening its balance sheet, including opportunistic asset sales and share repurchases [6][10] - The company is optimistic about the long-term outlook for lodging fundamentals, supported by consumer preferences for experiences and a favorable operating environment for urban markets [14][15] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that fundamentals have moderated and uncertainty persists due to macroeconomic risks, leading to an adjustment in full-year guidance [11][12] - The company expects RevPAR growth for 2025 to range between negative 1% and positive 1% [25] - The booking window has shortened, with a noted increase in cancellations primarily in the government segment [47][48] Other Important Information - The company ended Q1 with over $800 million in liquidity and $2.2 billion in debt, maintaining a strong balance sheet [22] - The company has a new $250 million share repurchase program approved by the Board [22] Q&A Session Summary Question: Can you provide insights on April's performance and how it compared to expectations? - Management indicated that April was expected to be slightly positive but came in lower than anticipated due to elongated spring break and softening government demand [30][31] Question: What is the current state of the balance sheet and capital markets? - The bank group market remains strong, with capacity for top-quality sponsors, while high-yield issuance has seen some widening in spreads [34][35] Question: What are the trends in the group segment and future bookings? - The group segment is performing well, with a healthy booking pace for the year, although cancellations were noted primarily in the government sector [78] Question: How is the company addressing the uncertainty in the transaction market? - The company is taking an opportunistic approach to asset sales, with one additional asset currently under consideration [92]

Core Insights - RLJ Lodging reported revenue of $328.12 million for the quarter ended March 2025, reflecting a 1.1% increase year-over-year, but a slight miss of 0.34% against the Zacks Consensus Estimate of $329.24 million [1] - The company achieved an EPS of $0.31, a significant improvement from -$0.01 in the same quarter last year, resulting in a positive surprise of 3.33% compared to the consensus estimate of $0.30 [1] Revenue Breakdown - Other revenue was reported at $22.95 million, slightly below the estimated $23.07 million, but showing a year-over-year increase of 3.9% [4] - Food and beverage revenue reached $37.51 million, exceeding the average estimate of $37.03 million, with a year-over-year growth of 5.1% [4] - Room revenue was $267.65 million, marginally below the estimated $268.06 million, but still reflecting a 0.4% increase compared to the previous year [4] Stock Performance - RLJ Lodging's shares have returned 6.6% over the past month, outperforming the Zacks S&P 500 composite, which saw a 0.4% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Financial Performance - RLJ Lodging reported quarterly funds from operations (FFO) of $0.31 per share, exceeding the Zacks Consensus Estimate of $0.30 per share, but down from $0.33 per share a year ago, indicating a 6.06% year-over-year decline [1] - The company achieved an FFO surprise of 3.33% for the quarter, following a previous surprise of 13.79% when it reported $0.33 per share against an expectation of $0.29 [1][2] - RLJ Lodging's revenues for the quarter were $328.12 million, slightly missing the Zacks Consensus Estimate by 0.34%, but up from $324.41 million year-over-year, reflecting a 2.21% increase [2] Market Performance - RLJ Lodging shares have declined approximately 28.9% since the beginning of the year, contrasting with the S&P 500's decline of 3.3% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating it is expected to perform in line with the market in the near future [6] Future Outlook - The current consensus FFO estimate for the upcoming quarter is $0.51 on revenues of $374.31 million, and for the current fiscal year, it is $1.52 on revenues of $1.39 billion [7] - The outlook for the REIT and Equity Trust - Other industry, to which RLJ Lodging belongs, is currently in the bottom 37% of Zacks industries, suggesting potential challenges ahead [8]

Financial Performance - Comparable RevPAR increased by 1.6% to $141.23 compared to the prior year[4] - Total revenues for Q1 2025 were $328.1 million, reflecting a 1.1% increase from $324.4 million in Q1 2024[5] - Net income decreased by 33.2% to $3.2 million from $4.7 million in the same period last year[5] - Comparable Hotel EBITDA was $85.3 million, down 3.4% from $88.3 million in Q1 2024[5] - Adjusted EBITDA for Q1 2025 was $77.6 million, a decrease of 2.5% compared to $79.6 million in Q1 2024[5] - Funds from Operations (FFO) attributable to common shareholders for Q1 2025 was $41.7 million, down from $43.5 million in Q1 2024, a decrease of 4.1%[38] - Adjusted FFO for Q1 2025 was $46.9 million, compared to $51.9 million in Q1 2024, a decline of 9.6%[38] - Comparable Hotel EBITDA margin for Q1 2025 was 26.1%, down from 27.3% in Q1 2024[45] - The company reported a net loss attributable to common shareholders of $2.9 million for Q1 2025, compared to a loss of $1.3 million in Q1 2024[37] Revenue Outlook - The updated full-year 2025 outlook projects Comparable RevPAR growth between -1.0% to +1.0%[13] - The forecast for Comparable Hotel EBITDA is between $365.5 million to $395.5 million for FY 2025[13] - The company expects full-year 2025 EBITDA to range between $316.3 million and $346.3 million[46] - The projected Adjusted FFO per common share for full-year 2025 is estimated to be between $1.38 and $1.58[47] Liquidity and Debt - The company had approximately $847.5 million in total liquidity as of March 31, 2025[9] - Total assets as of March 31, 2025, were $4.8 billion, a slight decrease from $4.9 billion as of December 31, 2024[34] - Total liabilities decreased to $2.57 billion as of March 31, 2025, from $2.59 billion as of December 31, 2024[34] - Total mortgage debt amounts to $206 million with a weighted average interest rate of 4.74%[49] - Corporate debt totals $2.025 billion with a weighted average interest rate of 4.52%[49] - The company has a $500 million borrowing capacity on the Revolver, with an unused commitment fee of 0.25% annually[51] - In April 2025, the company repaid the $100 million outstanding balance on the Revolver using proceeds from upsizing the $200 million term loan to $300 million[51] - The $200 million term loan maturing in 2026 was refinanced to $300 million, extending the maturity to April 2030[52] - The weighted average interest rate for total debt is 4.54%[49] - The company has fixed-rate senior notes due 2026 and 2029, each totaling $500 million with interest rates of 3.75% and 4.00% respectively[49] - The floating interest rates are hedged with interest rate swaps[50] - The company has a total of $1.5 billion in term loans maturing in 2026 and 2027[49] - The company has two one-year extension options for the refinanced term loan, subject to certain conditions[52] Shareholder Actions - The company repurchased 2.7 million shares for approximately $24.3 million year-to-date[4] - The company sold a non-core hotel for $24.3 million, achieving an 18.0x multiple based on projected 2025 Hotel EBITDA[7]

Group 1 - The article discusses the author's long-term investment approach, focusing on REITs, preferred stocks, and high-yield bonds, which began in high school in 2011 [1] - The author combines long stock positions with covered calls and cash secured puts, indicating a strategy that balances risk and return [1] - The primary focus of the author's coverage on Seeking Alpha includes REITs and financials, with occasional insights on ETFs and macro-driven stock ideas [1] Group 2 - The author has a beneficial long position in RLJ shares, indicating confidence in the company's performance [2] - The article expresses the author's personal opinions and does not involve compensation from any company mentioned, ensuring an unbiased perspective [2] - Seeking Alpha clarifies that past performance does not guarantee future results, emphasizing the independent nature of the analysis provided [3]

Hotel Properties and Operations - As of December 31, 2024, the company owned 96 hotel properties with approximately 21,300 rooms located in 23 states and the District of Columbia[20]. - Approximately 89.4% of the hotel properties operate under premium brands such as Marriott, Hilton, and Hyatt[29]. - The company aims to maximize returns by focusing on premium-branded, focused-service, and compact full-service hotels, which are expected to generate higher profit margins[25]. - The company intends to pursue a disciplined acquisition strategy, targeting properties priced below replacement cost and focusing on newly or recently built hotels[28]. - The company actively monitors hotel performance and collaborates with independent managers to enhance profitability and operational efficiency[30]. - The company has retained independent third-party hotel managers, with 30 agreements with Aimbridge Hospitality and 21 with Hilton as of December 31, 2024[68]. - The management companies are responsible for the operation of hotel properties, with 36 properties benefiting from franchise agreements with major brands like Hilton and Marriott[159]. - As of December 31, 2024, 57 hotels operated under franchise agreements with major brands, excluding 36 properties benefiting from franchise agreements through management agreements[166]. Financial Performance - Total revenues increased by $43.9 million to $1.4 billion for the year ended December 31, 2024, compared to $1.3 billion in 2023[210]. - Room revenue rose by $26.6 million to $1.1 billion, primarily due to a $25.6 million increase from comparable properties driven by corporate and group travel[211]. - Occupancy rate improved to 72.6% in 2024 from 71.8% in 2023, with an Average Daily Rate (ADR) of $199.22 and Revenue Per Available Room (RevPAR) of $144.66[212]. - Food and beverage revenue increased by $11.5 million to $153.1 million, attributed to higher outlet and banquet revenue[213]. - Other revenue, including parking and resort fees, grew by $5.8 million to $94.7 million[214]. - Net income attributable to common shareholders decreased by $8.4 million to $42.9 million for the year ended December 31, 2024[209]. - The company reported a gain of $8.3 million on the sale of hotel properties, compared to a loss of $34, indicating improved asset management[216]. Debt and Capital Management - As of December 31, 2024, the company had approximately $2.2 billion of debt outstanding, which could adversely affect operating performance and competitive positioning[85]. - The company has a $600.0 million unsecured revolving credit facility, which limits dividend payments under certain circumstances[188]. - The company anticipates that operating cash flow will only be adequate to repay a portion of its debt at maturity, necessitating refinancing or securities offerings[86]. - The company may face challenges in obtaining capital for acquisitions and improvements, which could adversely affect financial condition and results of operations[83]. - The company has fully repaid a $200.0 million maturing mortgage loan and entered into a new $500.0 million Term Loan to refinance existing debt[207]. Regulatory and Compliance Risks - The company is subject to various federal, state, and local regulations, ensuring compliance with safety and environmental standards[39]. - The company is required to distribute at least 90% of its REIT taxable income to maintain REIT qualification, limiting available cash for capital improvements and acquisitions[83]. - If the company fails to qualify as a REIT, it would be subject to U.S. federal income tax, which would reduce earnings and cash available for distribution to shareholders[127]. - The company may incur significant costs related to government regulation and litigation concerning environmental matters, which could adversely affect profitability and cash available for distribution to shareholders[123]. - The company is subject to various environmental, health, and safety laws that impose liability for contamination, potentially leading to unanticipated costs that could significantly reduce profitability[124]. Market and Competitive Environment - The lodging industry is highly competitive, with the company facing competition from institutional investors and other REITs for hotel acquisitions[33]. - The company believes that its affiliation with leading national brands provides a competitive advantage in attracting guests[32]. - The company may face significant competition from other lodging industry participants, which could adversely affect occupancy levels and average daily rates (ADRs)[84]. - The lodging industry is highly cyclical, with fluctuations in demand and operating performance significantly influenced by economic conditions and new hotel room supply[104]. - Labor shortages could slow growth or harm business operations, leading to increased labor costs due to competition for qualified employees[75]. Sustainability and Environmental Initiatives - The company has invested in over 300 efficiency projects since 2021, resulting in an 11% reduction in energy usage per square foot and a 22% reduction in greenhouse gas emissions per square foot as of 2023[51]. - The company is committed to reducing carbon emissions by 35% by 2030[51]. - The company is subject to risks associated with natural disasters and climate change, which could lead to significant repair costs and operational disruptions[108]. Shareholder Returns and Dividends - The company intends to make annual distributions of at least 90% of its REIT taxable income to maintain its REIT status[187]. - The company paid cash dividends of $0.10 per common share in Q1 and Q2 2024, and $0.15 in Q3 and Q4 2024, compared to $0.08 and $0.10 in the same quarters of 2023[180]. - The company has authorized a share repurchase program to repurchase up to $250.0 million of common and preferred shares, but there is no obligation to repurchase any specific dollar amount or number of shares[143]. - The company repurchased a total of 327,697 shares at an average price of $9.16 during the quarter ended October 31, 2024, with a remaining capacity to repurchase up to 25,904,232 shares under the 2024 Share Repurchase Program[192]. Cybersecurity and IT Risks - The company has a comprehensive cybersecurity risk management strategy, including a dedicated IT committee overseeing cybersecurity programs and continuous monitoring[145]. - The company maintains a cybersecurity incident response plan to address potential data incidents, ensuring timely and compliant responses[154]. - The company has not identified any cybersecurity threats that have materially affected its business strategy or financial condition[151]. - The company engages cybersecurity experts to analyze IT policies and infrastructure for effectiveness and improvement opportunities[147]. - The IT committee regularly assesses additional layers of security and evaluates new technologies for implementation to enhance cybersecurity[147]. - The company monitors third-party service providers to ensure compliance with privacy and cybersecurity policies[149].

EARNINGS SUPPLEMENTAL Q4 2024 FEBRUARY 2025 OVERVIEW | Key Statistics (1) (2) | | | --- | --- | | Properties | 95 | | Hotel Rooms | 21,156 | | Share Price | $10.21 | | Total Shares and Units Outstanding | 154.1 M | | Market Capitalization | $1.6 B | | Preferred Equity | $0.3 B | | Net Debt Outstanding | $1.8 B | | Total Enterprise Value (TEV) | $3.7 B | | Total Capitalization | $4.1 B | HOTEL TONNELLE NEW ORLEANS Debt Maturity Schedule (3) (1) For properties owned as of December 31, 2024; excludes Chateau L ...

RLJ Lodging Trust (NYSE:RLJ) Q4 2024 Earnings Conference Call February 26, 2025 10:00 AM ET Company Participants Nikhil Bhalla - Senior Vice President Finance and Treasurer Leslie Hale - President and CEO Sean Mahoney - Executive Vice President and CFO Tom Bardenett - Chief Operating Officer Conference Call Participants Michael Bellisario - Baird Jonathan Jenkins - Oppenheimer Austin Wurschmidt - KeyBanc Gregory Miller - Truist Dori Kesten - Wells Fargo Floris van Dijkum - Compass Point Chris Woronka - Deut ...

Core Insights - RLJ Lodging reported revenue of $329.99 million for Q4 2024, a year-over-year increase of 3.2% and exceeding the Zacks Consensus Estimate of $325.49 million by 1.38% [1] - The company achieved an EPS of $0.33, significantly up from $0.01 a year ago, with an EPS surprise of 13.79% compared to the consensus estimate of $0.29 [1] Revenue Breakdown - Other revenue was reported at $22.71 million, slightly below the average estimate of $23.05 million, reflecting a year-over-year increase of 2.9% [4] - Food and beverage revenue reached $39.59 million, surpassing the estimated $37.21 million, marking a 9.9% increase year-over-year [4] - Room revenue totaled $267.69 million, exceeding the average estimate of $264.21 million, with a year-over-year change of 2.3% [4] Stock Performance - RLJ Lodging's shares have declined by 7.9% over the past month, while the Zacks S&P 500 composite has decreased by 1.8% [3] - The stock currently holds a Zacks Rank of 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Financial Performance - RLJ Lodging reported quarterly funds from operations (FFO) of $0.33 per share, exceeding the Zacks Consensus Estimate of $0.29 per share, but down from $0.34 per share a year ago, representing an FFO surprise of 13.79% [1] - The company posted revenues of $329.99 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 1.38%, compared to $319.71 million in the same quarter last year [2] Market Performance - RLJ Lodging shares have declined approximately 9.1% since the beginning of the year, while the S&P 500 has gained 1.7% [3] - The current consensus FFO estimate for the upcoming quarter is $0.32 on revenues of $333.17 million, and for the current fiscal year, it is $1.57 on revenues of $1.4 billion [7] Industry Outlook - The REIT and Equity Trust - Other industry, to which RLJ Lodging belongs, is currently ranked in the bottom 46% of over 250 Zacks industries, indicating potential challenges ahead [8] - The performance of RLJ Lodging may be influenced by the overall outlook for the industry, as empirical research shows a strong correlation between near-term stock movements and trends in estimate revisions [5][8]