Financial Data and Key Metrics Changes - In Q4 2025, the company reported hotel EBITDA of $22.4 million and adjusted EBITDA of $20.2 million, with adjusted FFO of $0.21 per share [28] - GOP margin was 40.2%, with a decline of only 30 basis points despite a 1.8% decline in RevPAR [28] - For the full year 2025, RevPAR increased by 4.4% in Q1, but declined in subsequent quarters, ending with a total RevPAR of $142 for the year [31] Business Line Data and Key Metrics Changes - The company sold four older hotels for a total of $71.4 million, which contributed to reducing net debt by $70 million and achieving a leverage ratio of 20% [7][29] - The six predominantly leisure hotels produced RevPAR growth of 50 basis points in Q4 2025 [17] - The top five RevPAR hotels included Residence Inn in White Plains with $200, and Residence Inn in Fort Lauderdale at $186 [22] Market Data and Key Metrics Changes - Silicon Valley, the largest market, saw RevPAR growth of only 1% in 2026, with a notable decline in the third and fourth quarters [13] - San Diego's RevPAR declined by 8% in 2025 due to a retraction from a strong convention calendar in 2024 [18] - Los Angeles experienced a 4% increase in RevPAR, aided by fire-related business, but faced challenges due to unrest in the area [18] Company Strategy and Development Direction - The company plans to continue share repurchases, having already repurchased approximately 1.8 million shares at an average price of $6.87 [6] - Future acquisitions are anticipated as financing costs have decreased and seller pricing expectations have adjusted [11] - The company aims to invest in markets benefiting from increased business investments, particularly in the Central and Southeastern U.S. [12] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in long-term industry growth, citing a favorable supply-demand equation and healthy GDP growth [9] - Wage pressures are expected to moderate, with a projected increase of only 2% for the second half of 2025 [5] - The company anticipates a challenging Q1 2026 due to tough year-over-year comparisons but expects positive RevPAR growth for the remainder of the year [31] Other Important Information - The company completed the largest financing in its history, totaling $500 million, while reducing overall borrowing costs [7] - A 28% increase in common dividends was announced for 2025, returning approximately $35 million to shareholders [8] - The CapEx budget for 2026 is approximately $26 million, similar to 2025, with three renovations planned [26] Q&A Session Summary Question: Are there plans for further asset dispositions in 2026? - Management indicated there may be one or two more opportunistic sales, following the six hotels sold in the past 18 months [34] Question: What are the expectations for acquisitions given improved pricing? - Management noted that sellers are becoming more realistic about hotel valuations, which may create opportunities for acquisitions [35][36] Question: What expense pressures are anticipated in 2026? - Management expects utility costs to face some pressure early in 2026, but overall operating expenses are expected to remain stable [38] Question: How much room is left for productivity improvements? - Management stated that headcount has decreased by 13% year-over-year, and they will continue to focus on controlling wages and headcount [42] Question: What is the expected impact of the World Cup on business? - Management remains conservative about the World Cup's impact, acknowledging uncertainty in demand related to events in certain cities [50] Question: Can you elaborate on the RevPAR guidance for 2026? - Management expects low single-digit declines in Q1, followed by positive growth in the remaining quarters, aided by easier comps [55]

Financial Data and Key Metrics Changes - The company reported a comparable RevPAR of $400, reflecting a 4.2% increase year-over-year, marking the highest quarterly RevPAR in its history [7][8] - Comparable total hotel revenue increased by 4.4% year-over-year, while comparable hotel EBITDA was $70.8 million, representing a 5.3% increase [8][14] - The net loss attributable to common stockholders was $2.5 million, or $0.04 per diluted share, with AFFO per diluted share of $0.40 [14][15] Business Line Data and Key Metrics Changes - The resort portfolio reported a comparable RevPAR of $800, a 1.9% increase year-over-year, with combined comparable hotel EBITDA of $62 million, a 2% increase [9][10] - Urban hotels achieved a comparable RevPAR growth of 11.3%, with the Capitol Hilton benefiting from the presidential inauguration, showing a 19.3% year-over-year RevPAR growth [10][11] Market Data and Key Metrics Changes - The group revenue pace for 2025 is up 7%, with continued growth projected at 10% for 2026 [11][24] - The urban portfolio's comparable total revenue increased by 10%, and comparable hotel EBITDA increased by 39% year-over-year [24] Company Strategy and Development Direction - The company successfully extended its mortgage loan secured by the Ritz Carlton Lake Tahoe, improving its maturity schedule and lowering the cost of capital [11][12] - The company is focused on strategic capital expenditures, anticipating spending between $75 million and $95 million in 2025 to enhance portfolio quality and brand alignment [29][28] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the portfolio's resilience amid economic uncertainty, noting strong booking trends and a solid balance sheet [7][30] - The company highlighted the effectiveness of its cost control initiatives, resulting in improved hotel EBITDA margins [20][40] Other Important Information - The company redeemed approximately $90 million of its non-traded preferred stock, representing about 20% of the original capital raise [13] - The company is exploring asset sales, with increased buyer activity noted in the marketplace, particularly for upper upscale assets [52][53] Q&A Session Summary Question: Any trends in group bookings regarding cancellations or macroeconomic volatility? - Management noted that while the booking window is shortening slightly, there is no significant impact on group bookings, with Q1 group revenue up 31% year-over-year [32][33] Question: What is the company's exposure to international inbound business? - The company indicated that international inbound is a small part of the portfolio, with minimal impact observed, varying by market [34][36] Question: How does the company plan to grow EBITDA margins? - Management expressed optimism about margin growth, citing aggressive cost containment measures and productivity improvements [37][40] Question: Can you provide details on the Magnificent Mile conversion? - The conversion is expected to enhance asset value and performance, with minimal CapEx planned for public and meeting space renovations [41][42] Question: What is the status of preferred stock redemptions? - The company explained that redemptions are subject to timing and the structure of the security, with holders able to redeem after three years [46][49] Question: What is the outlook for asset sales and use of proceeds? - Management reported increased buyer activity and plans to utilize proceeds for preferred equity redemptions, share buybacks, and retiring corporate convertible notes [52][54]