RLJ Lodging Trust

Previous wording

We are a self-advised and self-administered Maryland REIT that owns primarily premium-branded, rooms-oriented, high-margin, focused-service and compact full-service hotels located within heart of demand locations. Our hotels are concentrated in markets that we believe exhibit multiple demand generators and attractive long-term growth prospects. We believe premium-branded, focused-service and compact full-service hotels with these characteristics generate high levels of RevPAR, strong operating margins and attractive returns. Focused-service and compact full-service hotels typically generate most of their revenue from room rentals, have limited food and beverage outlets and meeting space and require fewer employees than traditional full-service hotels. We believe these types of hotels have the potential to generate attractive returns relative to other types of hotels due to their ability to achieve RevPAR levels at or close to those achieved by traditional full-service hotels, while achieving higher profit margins due to their more efficient operating model and less volatile cash flows.

Current wording

We are a self-advised and self-administered Maryland REIT that owns primarily premium-branded, rooms-oriented, high-margin, focused-service and compact full-service hotels located within heart of demand locations. We own a geographically diversified portfolio of hotels located in urban markets that exhibit multiple demand generators and attractive long-term growth prospects. We believe that our investment strategy allows us to generate high levels of RevPAR, strong operating margins and attractive returns. Our focused-service and compact full-service hotels typically generate most of their revenue from room rentals, have limited food and beverage outlets and meeting space, and require fewer employees than traditional full-service hotels. We believe these types of hotels have the potential to generate attractive returns relative to other types of hotels due to their ability to achieve RevPAR levels at or close to those achieved by traditional full-service hotels while achieving higher profit margins due to their more efficient operating model and less volatile cash flows.

Previous wording

The majority of our hotels consist of premium-branded, focused-service and compact full-service hotels. As a result of this property profile, the majority of our customers are transient in nature. Transient business typically represents individual business or leisure travelers. The majority of our hotels are located in business districts within major metropolitan areas. Accordingly, business travelers represent the majority of the transient demand at our hotels. As a result, macroeconomic factors impacting business travel have a greater effect on our business than factors impacting leisure travel.

Current wording

The majority of our hotels consist of premium-branded, focused-service and compact full-service hotels. As a result of this property profile, the majority of our customers are transient in nature. Transient business typically represents individual business or leisure travelers. The majority of our hotels are located in business districts within major metropolitan areas which benefit from a wide range of demand sources, including corporate, educational, government, leisure and international, among others. As a result, macroeconomic or political actions that impact these areas may have a significant effect on our business.

Previous wording

ADR, Occupancy and RevPAR are commonly used measures within the lodging industry to evaluate operating performance. RevPAR is an important statistic for monitoring operating performance at the individual hotel property level and across our entire business. We evaluate individual hotel RevPAR performance on an absolute basis with comparisons to budget and prior periods, as well as on a regional and company-wide basis. ADR and RevPAR include only room revenue. Room revenue comprised approximately 81.9% of our total revenues for the year ended December 31, 2024, and it is dictated by demand (as measured by Occupancy), pricing (as measured by ADR) and our available supply of hotel rooms.

Current wording

ADR, Occupancy and RevPAR are commonly used measures within the lodging industry to evaluate operating performance. RevPAR is an important statistic for monitoring operating performance at the individual hotel property level and across our entire business. We evaluate individual hotel RevPAR performance on an absolute basis with comparisons to budget and prior periods, as well as on a regional and company-wide basis. ADR and RevPAR include only room revenue. Room revenue comprised approximately 81.0% of our total revenues for the year ended December 31, 2025, and it is dictated by demand (as measured by Occupancy), pricing (as measured by ADR) and our available supply of hotel rooms.

Previous wording

•Demand— The demand for lodging, especially business travel, generally fluctuates with the overall economy. Historically, periods of declining demand are followed by extended periods of relatively strong demand, which typically occurs during the growth phase of the lodging cycle.

Current wording

•Demand— The overall demand for lodging generally fluctuates with economic performance. Historically, periods of declining demand are followed by extended periods of relatively strong demand, which typically occurs during the growth phase of the lodging cycle.

Previous wording

We expect that our ADR, Occupancy and RevPAR performance will be impacted by macroeconomic factors such as regional and local employment growth, government spending, personal income and corporate earnings, office vacancy rates, business relocation decisions, airport activity, business and leisure travel demand, new hotel construction and the pricing strategies of our competitors. In addition, our ADR, Occupancy and RevPAR performance are dependent on the continued success of the Marriott, Hilton and Hyatt hotel brands.

Current wording

We expect that our ADR, Occupancy and RevPAR performance will be impacted by macroeconomic factors and government policies such as regional and local employment growth, government spending, personal income and corporate earnings, office vacancy rates, business relocation decisions, airport activity, business and leisure travel demand, new hotel construction and the pricing strategies of our competitors, as well as any changes in inbound international travel as a result of visa policies. In addition, our ADR, Occupancy and RevPAR performance are dependent on the continued success of the Marriott, Hilton and Hyatt hotel brands.

Previous wording

We rely on the performance of our hotel properties to increase revenues to keep pace with inflation. Generally, our hotel management companies possess the ability to adjust room rates daily, except for group or corporate rates contractually committed to in advance, although competitive pressures may limit the ability of our operators to raise rates faster than the rate of inflation or even at the same rate. High inflation may also have an adverse effect on our operating expenses, including, but not limited to, labor, supplies, repairs and maintenance, as these costs could increase at a faster rate than any increase in our revenues. Inflation could also have an adverse effect on consumer spending, which could impact Occupancy levels at our hotel properties and, in turn, our own results of operations.

Current wording

We rely on the performance of our hotel properties to increase revenues to keep pace with inflation. Generally, our hotel management companies possess the ability to adjust room rates daily, except for group or corporate rates contractually committed to in advance, although competitive pressures may limit the ability of our operators to raise rates faster than the rate of inflation or even at the same rate. High inflation may also have an adverse effect on our operating expenses, including, but not limited to, labor, supplies, repairs and maintenance, as these costs could increase at a faster rate than any increase in our revenues. Additionally, proposed or enacted tariffs on imported goods, including construction materials, furniture, and equipment, may further exacerbate inflationary pressures on renovation costs and limit the availability of certain supplies, thereby increasing the cost and/or delaying the timing of planned capital projects. Inflation could also have an adverse effect on consumer spending, which could impact demand at our hotel properties and, in turn, our results of operations.

Previous wording

•Sold two hotel properties for a combined sales price of approximately $20.8 million.

Current wording

•Sold three hotel properties for a combined sales price of $73.7 million.

Previous wording

•Exercised one-year extension options on $181.0 million in mortgage loans to extend the maturities to April 2025.

Current wording

•Exercised the final one-year extension options on $181.0 million in mortgage loans to extend the maturities to April 2026.

Previous wording

•Repurchased and retired approximately 2.3 million common shares for approximately $22.0 million.

Current wording

•Repurchased and retired approximately 3.3 million common shares for approximately $28.6 million.

Previous wording

At December 31, 2024 and 2023, we owned 96 and 97 hotel properties, respectively. Based on when a hotel property is acquired or sold, the operating results for certain hotel properties are not comparable for the years ended December 31, 2024 and 2023. The non-comparable properties include two hotel properties that were sold and one hotel property that was acquired in 2024.

Current wording

At December 31, 2025 and 2024, we owned 93 and 96 hotel properties, respectively. Based on when a hotel property is acquired or sold, the operating results for certain hotel properties are not comparable for the years ended December 31, 2025 and 2024. The non-comparable properties include five hotel properties that were sold in 2025 and 2024 and one hotel property that was acquired in 2024.

Previous wording

Total revenues increased $43.9 million to $1.4 billion for the year ended December 31, 2024, from $1.3 billion for the year ended December 31, 2023. The increase was a result of a $26.6 million increase in room revenue, an $11.5 million increase in food and beverage revenue, and a $5.8 million increase in other revenue.

Current wording

Total revenues decreased $19.6 million to $1,349.9 million for the year ended December 31, 2025, from $1,369.4 million for the year ended December 31, 2024. The decrease was the result of a $28.3 million decrease in room revenue, offset by a $5.1 million increase in food and beverage revenue, and a $3.6 million increase in other revenue.

Previous wording

Room revenue increased $26.6 million to $1.1 billion for the year ended December 31, 2024, from $1.1 billion for the year ended December 31, 2023. The increase was the result of a $25.6 million increase in room revenue attributable to the comparable properties and was primarily due to an increase in corporate and group travel.

Current wording

Room revenue decreased $28.3 million to $1,093.3 million for the year ended December 31, 2025, from $1,121.6 million for the year ended December 31, 2024. The decrease was the result of a $21.6 million decrease in room revenue attributable to the comparable properties and a $6.7 million decrease in room revenue attributable to the non-comparable properties. The decrease in room revenue from the comparable properties was primarily due to a decrease in international, government, corporate and group travel.

Previous wording

Food and beverage revenue increased $11.5 million to $153.1 million for the year ended December 31, 2024, from $141.6 million for the year ended December 31, 2023. The increase in food and beverage revenue was primarily due to increases in outlet revenue and banquet and catering revenue.

Current wording

Food and beverage revenue increased $5.1 million to $158.2 million for the year ended December 31, 2025, from $153.1 million for the year ended December 31, 2024. The increase in food and beverage revenue was primarily due to increases in banquet and outlet revenue and the ramping up of our recently converted and renovated hotels.

Previous wording

Other revenue, which includes revenue derived from ancillary sources such as parking fees, resort fees, gift shop sales and other guest service fees, increased $5.8 million to $94.7 million for the year ended December 31, 2024, from $88.9 million for the year ended December 31, 2023. The increase in other revenue was primarily due to an increase in parking and resort fees.

Current wording

Other revenue increased $3.6 million to $98.4 million for the year ended December 31, 2025, from $94.7 million for the year ended December 31, 2024. The increase in other revenue was primarily due to an increase in gift shop sales, parking and resort fees.

Previous wording

Property operating expenses increased $43.3 million to $877.9 million for the year ended December 31, 2024, from $834.7 million for the year ended December 31, 2023. The increase was due to a $41.0 million increase in property operating expenses attributable to the comparable properties and a $2.3 million increase in property operating expenses attributable to the non-comparable properties.

Current wording

Property operating expenses increased $9.6 million to $887.5 million for the year ended December 31, 2025, from $877.9 million for the year ended December 31, 2024. The increase was due to a $14.9 million increase in property operating expenses attributable to the comparable properties offset by a $5.3 million decrease in property operating expenses attributable to the non-comparable properties.

Previous wording

The increase in property operating expenses attributable to the comparable properties was primarily due to increases in wages and benefits, as well as increases in room and food and beverage expenses, and increases in other operating expenses, primarily due to increases in sales and marketing, utilities, and administrative expenses.

Current wording

The increase in property operating expenses attributable to the comparable properties was primarily due to increases in wages and benefits, as well as increases in room expenses and food expenses and increases in other operating expenses, including increases in sales and marketing expenses, utilities and general liability insurance coverage. This was offset by a decrease in management and franchise fee expense, which was due to lower revenues as well as recently amended management and franchise agreements.

Previous wording

Property tax, insurance and other expense increased $6.8 million to $107.0 million for the year ended December 31, 2024, from $100.2 million for the year ended December 31, 2023. The increase was primarily attributable to increases in property tax assessments and property insurance premiums.

Current wording

Property tax, insurance and other expense decreased $5.7 million to $101.3 million for the year ended December 31, 2025, from $107.0 million for the year ended December 31, 2024. The decrease was primarily attributable to a decrease in property insurance premiums and a decrease in real estate tax expense including the beneficial impact of successful real estate tax appeals.

Previous wording

General and administrative expense decreased $4.2 million to $54.8 million for the year ended December 31, 2024, from $59.0 million for the year ended December 31, 2023. The decrease was primarily attributable to a decrease in non-cash compensation expense related to certain share-based awards granted during 2021 that became fully vested during the second quarter of 2024.

Current wording

General and administrative expense decreased $7.2 million to $47.6 million for the year ended December 31, 2025, from $54.8 million for the year ended December 31, 2024. The decrease was primarily attributable to a decrease in non-cash compensation expense, including the impact of a $1.6 million benefit as a result of the performance unit forfeitures related to the departure of Company executives during the year ended December 31, 2025. In addition, there were certain share-based awards granted during 2021 that became fully vested during the second quarter of 2024.

Previous wording

Other income, net increased $1.0 million to $5.3 million for the year ended December 31, 2024, from $4.4 million for the year ended December 31, 2023. The increase was primarily attributable to an increase in COVID-19 relief awards during the year ended December 31, 2024.

Current wording

Other income, net decreased $1.9 million to $3.5 million for the year ended December 31, 2025, from $5.3 million for the year ended December 31, 2024. The decrease was primarily attributable to the receipt of certain one-time COVID-19 relief awards during the year ended December 31, 2024.

Previous wording

Interest income decreased $2.4 million to $17.3 million for the year ended December 31, 2024, from $19.7 million for the year ended December 31, 2023. The decrease was attributable to lower average cash balances, partially offset by higher interest rates.

Current wording

Interest income decreased $3.7 million to $13.6 million for the year ended December 31, 2025, from $17.3 million for the year ended December 31, 2024. The decrease was attributable to the combination of lower interest rates and lower average cash balances in 2025.

Previous wording

Interest expense increased $12.6 million to $111.4 million for the year ended December 31, 2024, from $98.8 million for the year ended December 31, 2023. The increase was attributable to higher base interest rates on our unhedged variable rate debt combined with an increase in the amount of our debt that was unhedged. The components of our interest expense for the years ended December 31, 2024 and 2023 were as follows (in thousands):

Current wording

Interest expense increased $0.9 million to $112.3 million for the year ended December 31, 2025, from $111.4 million for the year ended December 31, 2024. The components of our interest expense for the years ended December 31, 2025 and 2024 were as follows (in thousands):

Previous wording

Gain (Loss) on Sale of Hotel Properties, net

Current wording

(Loss) Gain on Sale of Hotel Properties, net

Previous wording

During the year ended December 31, 2024, we sold two hotel properties for a combined sales price of approximately

Current wording

During the year ended December 31, 2025, we sold three hotel properties for a combined sales price of $73.7 million and recorded a net loss on the sales of approximately $1.5 million. During the year ended December 31, 2024, we sold two hotel properties for a combined sales price of approximately $20.8 million and recorded a net gain on the sales of approximately $8.3 million.

Previous wording

As of December 31, 2024, we had $433.3 million of cash, cash equivalents, and restricted cash reserves as compared to $555.3 million at December 31, 2023. In addition, we had $500.0 million available on our Revolver at December 31, 2024.

Current wording

As of December 31, 2025, we had $442.1 million of cash, cash equivalents, and restricted cash reserves as compared to $433.3 million at December 31, 2024. In addition, we had $600.0 million available on our Revolver at December 31, 2025.

Previous wording

Our principal uses of capital for the year ended December 31, 2024 were our acquisition of a fee simple interest in our Wyndham Boston Beacon Hill hotel property, the purchase of a hotel property, capital improvements and additions to hotel properties, repayment of a portion of our Revolver, repayments of a Term Loan and a mortgage loan, the repurchase of common shares under our share repurchase programs, and distributions on common and preferred shares. Our principal sources of capital for the year ended December 31, 2024 were cash generated from operations, the sales of two hotel properties, and borrowings under our Revolver and on a new Term Loan.

Current wording

Our principal uses of capital for the year ended December 31, 2025 were capital improvements and additions to hotel properties, repayment of the full outstanding balance on our Revolver, paydown of a mortgage loan, the repurchase of common shares under our share repurchase programs, and distributions on common and preferred shares. Our principal sources of capital for the year ended December 31, 2025 were cash generated from operations, the sales of three hotel properties, and borrowings on a term loan.

Previous wording

As of December 31, 2024, we had approximately $2.2 billion in debt outstanding with a weighted average interest rate of 4.58%, of which $181.0 million is scheduled to become due in the succeeding 12 months, excluding extension options. As of December 31, 2024, our total future minimum lease payments were $580.1 million, of which $9.7 million is scheduled to become due in the succeeding 12 months. For details regarding our indebtedness and lease obligations, refer to Note 7, Debt, and Note 10, Commitments and Contingencies, to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Current wording

As of December 31, 2025, we had approximately $2.2 billion in debt outstanding with a weighted average interest rate of 4.56%, of which $879.8 million is scheduled to become due in the succeeding 12 months, excluding extension options. As of December 31, 2025, our total future minimum lease payments were $570.4 million, of which $10.2 million is scheduled to become due in the succeeding 12 months. For details regarding our indebtedness and lease obligations, refer to Note 7, Debt, and Note 10, Commitments and Contingencies, to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Previous wording

The net cash flow provided by operating activities totaled $285.4 million and $315.1 million for the years ended December 31, 2024 and 2023, respectively. The cash flows provided by operating activities generally consist of the net cash generated by our hotel operations, cash paid for corporate expenses and other working capital changes. Refer to the "Results of Operations" section for further discussion of our operating results for the years ended December 31, 2024 and 2023.

Current wording

The net cash flow provided by operating activities totaled $243.8 million and $285.4 million for the years ended December 31, 2025 and 2024, respectively. The cash flows provided by operating activities generally consist of the net cash generated by our hotel operations, cash paid for corporate expenses and other working capital changes. Refer to the "Results of Operations" section for further discussion of our operating results for the years ended December 31, 2025 and 2024.

Previous wording

The net cash flow used in investing activities totaled $134.7 million for the year ended December 31, 2023 primarily due to $132.3 million in capital improvements and additions to our hotel properties and other assets and a purchase deposit of $2.4 million.

Current wording

The net cash flow used in investing activities totaled $57.4 million for the year ended December 31, 2025 primarily due to $126.4 million in capital improvements and additions to our hotel properties and other assets. The net cash flow used in investing activities was partially offset by $69.0 million in net proceeds from the sales of three hotel properties.

Previous wording

The net cash flow used in investing activities totaled $275.7 million for the year ended December 31, 2024 primarily due to a $122.8 million acquisition of a fee simple interest in our Wyndham Boston Beacon Hill hotel property, a $35.9 million acquisition of a hotel property, and $136.5 million in capital improvements and additions to our hotel properties and other assets. The net cash flow used in investing activities was partially offset by $19.5 million in proceeds from the sales of two hotel properties.

Current wording

The net cash flow used in investing activities totaled $275.7 million for the year ended December 31, 2024 primarily due to a $122.8 million acquisition of a fee simple interest in our Wyndham Boston Beacon Hill hotel property, a $35.9 million acquisition of a hotel property, and $136.5 million in capital improvements and additions to our hotel properties and other assets. The net cash flow used in investing activities was partially offset by $19.5 million in net proceeds from the sales of two hotel properties.

Previous wording

With respect to some of our hotels that are operated under franchise agreements with major national hotel brands and for some of our hotels subject to first mortgage liens, we are obligated to maintain FF&E reserve accounts for future capital expenditures at these hotels. The amount funded into each of these reserve accounts is generally determined pursuant to the management agreements, franchise agreements and/or mortgage loan documents for each of the respective hotels, and typically ranges between 3.0% and 5.0% of the respective hotel’s total gross revenue. As of December 31, 2024, approximately $23.5 million was held in FF&E reserve accounts for future capital expenditures.

Current wording

With respect to some of our hotels that are operated under franchise agreements with major national hotel brands and for some of our hotels subject to first mortgage liens, we are obligated to maintain FF&E reserve accounts for future capital expenditures at these hotels. The amount funded into each of these reserve accounts is generally determined pursuant to the management agreements, franchise agreements and/or mortgage loan documents for each of the respective hotels, and typically ranges between 3.0% and 5.0% of the respective hotel’s total gross revenue. As of December 31, 2025, approximately $31.9 million was held in FF&E reserve accounts for future capital expenditures.