Service Properties Trust (NASDAQ:SVC) Q1 2024 Earnings Call Transcript May 8, 2024 10:00 AM ET Company Participants Stephen Colbert - Director of IR Todd Hargreaves - President and CIO Brian Donley - Treasurer and CFO Conference Call Participants Bryan Maher - B. Riley Securities Dori Kesten - Wells Fargo Tyler Batory - Oppenheimer Operator Good morning, and welcome to the Service Properties Trust First Quarter 2024 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructio ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 1-11527 SERVICE PROPERTIES TRUST (Exact Name of Registrant as Specified in Its Charter) (State or Other Jurisdiction of Incorporation or Organization) Maryland ...

ES TRUST Service Properties Trust First Quarter 2024 Financial Results and Supplemental Information May 7, 2024 Table of Contents | QUARTERLY RESULTS | | | | | --- | --- | --- | --- | | | Service Properties Trust Announces First Quarter 2024 Financial Results. | 4 | | | | First Quarter 2024 Highlights and and and the many of the many of the many of the many and concess and any and any and any and | 5 | | | FINANCIALS | | | | | | Key Financial Data ... | 7 | | | | Condensed Consolidated Statements of Income ...

Financial Data and Key Metrics Changes - For Q4 2023, normalized FFO was $50 million or $0.30 per share, down from $0.44 per share in the prior year quarter [22] - Adjusted EBITDAre decreased by 6.2% year-over-year to $141.2 million [22] - Hotel EBITDA for 221 hotels was $43.6 million, a 19.3% decline from the prior year [24] - Gross operating profit margin percentage declined by 210 basis points to 26.3% [40] Business Line Data and Key Metrics Changes - The hotel portfolio experienced a RevPAR decline of 2.2% year-over-year, with a significant impact from renovations [17] - Full-service hotels gained 40 basis points in RevPAR, driven by group and contract segments, which increased by 6.2% and 10.2% year-over-year, respectively [18] - The select service hotels saw a RevPAR decline of 5.8% due to renovations affecting 18 of 61 hotels [8] Market Data and Key Metrics Changes - OTA revenue as a percentage of total revenues decreased from 27.6% to 25.9% year-over-year [35] - The net lease portfolio was 97.1% leased with a weighted average lease term of 8.8 years [19] Company Strategy and Development Direction - The company is focused on optimizing its portfolio by selling lower-performing hotels and investing in renovations to improve performance [20][38] - A total of 36 hotels are expected to be under renovation throughout 2024, with capital expenditures projected between $250 million to $275 million [27][33] - The company aims to enhance brand awareness and loyalty programs to drive revenue growth [66] Management's Comments on Operating Environment and Future Outlook - Management expects market softness to continue in the first half of 2024 but is optimistic about improvements in the latter half due to macroeconomic factors [33] - The company anticipates continued disruption from renovations but expects to see benefits from completed renovations in terms of RevPAR increases [36] - Labor costs are expected to remain elevated due to significant year-over-year hourly wage increases [86] Other Important Information - The company has $5.6 billion of fixed-rate debt outstanding with a weighted average interest rate of 5.94% [26] - A regular quarterly common dividend of $0.20 per share was announced, representing a 48% normalized FFO payout ratio for 2023 [42] Q&A Session Summary Question: Can you quantify the impact of hotel renovations on margins and RevPAR? - Management indicated that the disruption from renovations would result in a projected 1% to 2% decline in RevPAR for the full year, with some hotels expected to see improvements post-renovation [44][45] Question: What is the expected capital expenditure for renovations? - The company expects to spend $250 million to $275 million in 2024 on capital improvements, with a portion deferred from 2023 [27][83] Question: How is the company addressing labor costs? - Management noted that most open positions have been filled, reducing reliance on contract labor, which allows for better negotiation on wages [76][86] Question: What is the outlook for the net lease portfolio? - The net lease portfolio remains stable, with 68% of annual minimum rents coming from an investment-grade rated tenant [38] Question: What is the expected timing for the sale of the 22 Sonesta hotels? - The company plans to market the hotels and expects to receive offers towards the end of March or early April, with sales likely to close in the second and third quarters [89]

RETURN TO TABLE OF CONTENTS 3 SERVICE PROPERTIES TRUST February 28, 2024 Table of Contents Quarterly Results RETURN TO TABLE OF CONTENTS 4 Our net lease portfolio continues to provide a dependable cash flow stream led by our TA leases, which are guaranteed by an investment grade rated company in BP. Todd Hargreaves, President and Chief Investment Officer Dividend: Conference Call: About Service Properties Trust: Fourth Quarter 2023 Highlights Financing Activities Investment Activity • Normalized FFO of $50. ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 1-11527 SERVICE PROPERTIES TRUST (Exact Name of Registrant as Specified in Its Charter) (State or Other Jurisdiction of Incorporation or Organization) Maryland 04-3262075 (I.R.S. Emp ...

Service Properties Trust Fourth Quarter 2023 Financial Results and Supplemental Information February 28, 2024 The Royal Sonesta Chicago Downtown Chicago, IL Table of Contents | QUARTERLY RESULTS | | | | | --- | --- | --- | --- | | | Service Properties Trust Announces Fourth Quarter 2023 Financial Results. Coaster of the course of contraction works world supportunition wor | 4 | | | | Fourth Quarter 2023 Highlights. | 5 | | | FINANCIALS | | | | | | Key Financial Data. | 1 | | | | Consolidated Statements of I ...

Financial Data and Key Metrics Changes - Adjusted EBITDAre increased by 1% year-over-year to $175.3 million, benefiting from additional interest income and an income tax benefit, partially offset by a decline in hotel results [10][78] - Normalized FFO was $92.1 million or $0.56 per share, compared to $0.54 per share in the prior year quarter [78] - Hotel EBITDA for 221 hotels was $75.5 million, a 1.6% decline from the prior year [11] Business Line Data and Key Metrics Changes - Full-service RevPAR increased by 2.5% year-over-year, while select-service RevPAR declined by 0.2% and extended-stay RevPAR decreased by 1.3% [4][85] - Group revenues increased significantly, with Sonesta's group pace up 32.5% compared to last year [27][72] - The transient revenue percentage of total hotel revenues declined from 78.1% to 75.4%, while group revenue increased from 15.5% to 17.2% [73] Market Data and Key Metrics Changes - Business travel recovery is at 76.1% of 2019 levels, with corporate negotiated revenue increasing by 1.3% year-over-year [74] - The gap between weekend and weekday occupancy is narrowing, with weekend occupancy outpacing weekday by 4.9 percentage points in September [6] - OTA revenues as a percentage of total revenues decreased from 30.8% to 29.4% year-over-year [26] Company Strategy and Development Direction - The company remains focused on increasing brand awareness through advertising and media campaigns, as well as expanding its loyalty program [6][23] - There is a disciplined approach to capital allocation, with a focus on addressing upcoming debt maturities before pursuing acquisitions [16][29] - The company is evaluating various options to manage debt maturities and mitigate the impact of higher interest rates [93] Management Comments on Operating Environment and Future Outlook - Management noted that hotel operating expenses remain elevated, with insurance premiums increasing by 15% year-over-year [75] - The company expects a decline in hotel EBITDA sequentially due to seasonal patterns, typically starting mid-November [32] - Preliminary October 2023 RevPAR was $96.62, with projections for Q4 RevPAR between $76 to $79 [92] Other Important Information - The company has $5.8 billion of fixed-rate debt outstanding with a weighted average interest rate of 5.2% [12] - The net lease portfolio provides dependable cash flows, with 68% of annual minimum rents coming from an investment-grade-rated tenant [9] - The company announced a regular quarterly common dividend of $0.20 per share, representing a 44% normalized FFO annualized payout ratio [13] Q&A Session Summary Question: Can you provide color on October RevPAR and guidance for Q4? - Management indicated that October is typically strong, but demand trends are expected to taper off in Q4 due to seasonal patterns [21] Question: What is the historical mix of group business? - Group business is currently lower than historical levels but is showing strong booking pace for 2024 [22] Question: How is the Sonesta brand resonating with consumers? - The Sonesta brand is seeing increased loyalty program usage and brand recognition, with metrics showing growth year-over-year [23][56] Question: What are the expectations for capital expenditures? - The company expects capital expenditures of $65 to $75 million in Q4, with a multi-year renovation plan underway [15][33] Question: How is the company addressing debt maturities? - The company is evaluating options for refinancing upcoming debt maturities and has significant liquidity available [93]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 1-11527 SERVICE PROPERTIES TRUST (Exact Name of Registrant as Specified in Its Charter) (State or Other Jurisdiction of Incorporation or Organization) Mary ...

Service Properties Trust (NASDAQ:SVC) Q2 2023 Earnings Conference Call August 8, 2023 10:00 AM ET Company Participants Stephen Colbert - Director, IR Todd Hargreaves - President & CIO Brian Donley - CFO & Treasurer Conference Call Participants Bryan Maher - B. Riley Securities Dori Kesten - Wells Fargo Securities Tyler Batory - Oppenheimer Operator Good morning, and welcome to the Service Properties Trust Second Quarter 2023 Earnings Conference Call. [Operator Instructions]. I would now like to turn the cal ...