RLJ Lodging Trust

Second-quarter comparable RevPAR was $167, up 6.8% year over year, driven by ADR growth of 4.9% to $217 and occupancy of 77%, up 130 basis points. Hotel EBITDA was $119.5 million, up $8 million or 7.1%, with hotel EBITDA margin of 31.3%, up 10 basis points; adjusted EBITDA was $110.4 million and adjusted FFO per diluted share was $0.52. For 2026, RLJ now expects comparable RevPAR growth of 3.5% to 4.5%, comparable hotel EBITDA of $369 million to $389 million, corporate adjusted EBITDA of $336 million to $356 million, and adjusted FFO per diluted share of $1.37 to $1.50. It also guided to capital expenditures of $80 million to $90 million, cash G&A of $33.5 million to $34.5 million, and net interest expense of $101 million to $103 million.

Leslie D. Hale said the quarter exceeded expectations and reflected broad-based strength across the portfolio, especially in urban markets benefiting from business travel and urban leisure demand. She emphasized that the company’s renovations and conversions are unlocking value, pointing to strong performance from recently completed projects and the new Autograph Collection conversion in Pittsburgh. Her tone was constructive but measured, repeatedly noting that visibility remains limited because of the short booking window and a fluid macro backdrop.

Nikhil Bhalla highlighted that comparable RevPAR reached $167, with April up 5.8%, May up 2.5%, and June up 12.4%, and he noted hotel EBITDA margins of 31.3%. He said expenses rose as occupancy beat expectations, with per occupied room expenses up 4.9% and fixed costs up 6.4%, though only 3.4% excluding a prior-year tax benefit. He also said RLJ ended the quarter with about $1 billion of liquidity, including $600 million of undrawn revolver capacity, $2.2 billion of debt after paying off notes due July 1, no maturities until 2029, 83 of 91 hotels unencumbered, and a 4.8% weighted average interest rate; 72% of debt is fixed or hedged. He reiterated the dividend of $0.15 per share and said the company sold one hotel at a 29.2x hotel EBITDA multiple including required capex.

Analysts focused on the strength of business transient demand, and management said it is broad based, coming through national accounts and GDS, with strong contributions from tech, finance, defense, and other industries. On costs and margins, management said second-half expense growth should moderate to about 3% at the midpoint and 4% at the high end, but noted the mix is still tilted toward occupancy, transient travel, and higher transaction and energy costs. Questions on capital allocation centered on buybacks versus deals; management said it views its stock as undervalued but will remain disciplined across repurchases, dispositions, and reinvestment. On conversions and Key West, management said it expects 2 to 3 conversion projects per year, cited strong expected returns, and said the new Margaritaville-branded asset should fit the market well.