Executive Summary

Q2 results modestly beat consensus on revenue, EPS, and EBITDA, but were down year over year on softer occupancy and higher fixed costs; full-year guidance was trimmed (RevPAR, margin, EBITDAre), while July prelim RevPAR rose ~1%, hinting at stabilization .
Beats vs S&P Global consensus: Revenue $384.37M vs $381.18M; EPS $0.27 vs $0.265; EBITDA $132.98M vs $131.92M (small beats across all three) .
Management is leaning into mix optimization and group to offset government travel weakness; market share strengthened through the quarter; July bookings showed sequential improvement, but August/September booking position was softer, informing a conservative guide .
Capital allocation remains a catalyst: $16.9M of repurchases in Q2 (1.4M shares), $43.2M YTD; new $385M term loan extended maturities and increased revolver capacity; pending dispositions (~~$36.3M) and a Nashville acquisition (~~$98.2M) provide optionality .
Key narrative: near-term macro/policy uncertainty and government pullback pressured occupancy and margins, but limited new supply in markets, mix management, and repurchases support the medium-term setup; watch Q3 cadence (August/September) and confirmation of Q4 reacceleration .

What Went Well and What Went Wrong

What Went Well
- “Comparable Hotels RevPAR declines moderating each month” and July prelim RevPAR up ~1% YoY; market share strengthened across the portfolio .
- Group mix and property-direct bookings helped offset softness elsewhere; group benefited ADR and improved sequential trends from April to June .
- Balance sheet actions improved flexibility: $385M term loan to 2030, increased fixed/hedged debt to ~67% post-quarter, and raised revolver availability to ~$650M .
What Went Wrong
- Q2 Comparable RevPAR -1.7% and occupancy down 160 bps YoY; Comparable Hotel EBITDA margin -200 bps to 37.4% on higher fixed costs and softer top line .
- Full-year 2025 outlook reduced: RevPAR change cut by 50 bps at midpoint, margin cut by 20 bps, Adjusted EBITDAre reduced by $5.5M at midpoint .
- Government travel pullback and April holiday/calendar effects weighed on results; booking position for August/September down YoY, requiring conservative H2 stance .

Financial Results

Sequential trend (Q4 2024 → Q1 2025 → Q2 2025):

Metric	Q4 2024	Q1 2025	Q2 2025
Total revenue ($)	$333,036,000	$327,702,000	$384,370,000
Net income per share ($)	$0.12	$0.13	$0.27
EBITDA ($)	$97,927,000	$98,902,000	$132,975,000
Adjusted EBITDAre ($)	$96,590,000	$95,378,000	$133,006,000
Operating margin %	15.0%	15.5%	22.1%

Year-over-year comparison (Q2 2024 → Q2 2025):

Metric	Q2 2024	Q2 2025
Total revenue ($)	$390,077,000	$384,370,000
Net income per share ($)	$0.31	$0.27
EBITDA ($)	$141,332,000	$132,975,000
Adjusted EBITDAre ($)	$140,916,000	$133,006,000
Operating margin %	24.0%	22.1%

KPIs (Comparable Hotels and Actual):

KPI	Q2 2024	Q1 2025	Q2 2025
Comparable ADR ($)	$163.80	$156.76	$163.62
Comparable Occupancy (%)	79.9%	71.2%	78.6%
Comparable RevPAR ($)	$130.89	$111.59	$128.68
Actual ADR ($)	$162.98	$156.24	$163.56
Actual Occupancy (%)	79.8%	71.1%	78.6%
Actual RevPAR ($)	$130.07	$111.04	$128.59

Estimates vs Actual (S&P Global; Q2 2025):

Metric	Consensus	Actual
Primary EPS (GAAP)	$0.265*	$0.27
Revenue ($)	$381,184,510*	$384,370,000
EBITDA ($)	$131,924,340*	$132,975,000

Values retrieved from S&P Global.*

Segment breakdown: Not applicable (rooms-focused REIT; Company reports “Comparable Hotels” portfolio-level metrics rather than operating segments) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net income ($M)	FY 2025	$167 – $195	$161 – $187	Lowered
Comparable Hotels RevPAR change	FY 2025	(-1.0%) – 1.0%	(-1.5%) – 0.5%	Lowered
Comparable Hotels Adjusted Hotel EBITDA Margin %	FY 2025	33.7% – 34.7%	33.5% – 34.5%	Lowered
Adjusted EBITDAre ($M)	FY 2025	$433 – $457	$428 – $450	Lowered
Capital expenditures ($M)	FY 2025	$80 – $90	$80 – $90	Maintained
Monthly distribution	Ongoing	$0.08 per share ($0.96 annualized)	$0.08 per share ($0.96 annualized)	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4’24, Q1’25)	Current Period (Q2’25)	Trend
Demand & RevPAR cadence	Q4: steady business transient, leisure strength; 2025 start impacted by weather; initial 2025 guide assumed growth . Q1: RevPAR -0.5%; April down ~3.5% on calendar; bookings supported flat back-half RevPAR; Q2 worst quarter expected .	Q2: RevPAR -1.7% YoY; declines moderated each month; July prelim +~1%; Q3 bookings softer in Aug/Sept, Oct improving .	Stabilizing into July; cautious Q3; better Q4 setup .
Government travel	Q1: pullback emerged; government mix ~5–6% historically; impact varied by market .	Continued government softness cited as a headwind in April; teams offset with group at attractive rates .	Headwind moderating; offset via mix .
Group/business mix	Q1: group strong; property-direct bookings improved; ADR held .	Group ADR positive driver; layering near-term groups at attractive rates; market share improved .	Positive contributor .
Macro/policy uncertainty & calendar	Q1: macro uncertainty, weather/Easter/eclipse timing hurt Q1 and April .	April cited as “most challenging” month; macro/policy noise persists; Rosh Hashanah shift impacts Sept .	Mixed; easing slightly but still a near-term risk .
Supply growth	Q1: ~60% of hotels with no new supply within 5 miles; unique cycle support .	Reiterated favorable supply dynamics limiting downside risk .	Supportive .
Capital allocation (M&A/asset sales/buybacks)	Q1: sold 2 hotels ($21M), contracted $16M sale; under contract for Tampa ($18.8M) and Nashville Motto ($98.2M); repurchased ~$32M YTD .	Q2: acquired Homewood Tampa ($18.8M); 3 hotels under sale contract (~$36.3M); repurchased 1.4M shares ($16.9M); nearly $78M repurchased since May 2024 .	Active; favoring repurchases when shares imply discounts .
Capex & tariffs	Q1: plan $80–$90M; watch tariffs, no known delays .	FY25 capex plan reaffirmed; ~20 hotel renovations in plan .	Steady; monitoring tariffs .

Management Commentary

“Fundamentals…improved sequentially…preliminary results for July show Comparable Hotels RevPAR growth of approximately 1% year over year.” – Justin Knight, CEO .
“Higher fixed costs and lower than expected top line growth impacted our bottom line…though down slightly, [we] continue to produce industry leading margins” – Justin Knight .
“We…optimiz[ed] the mix of business…layering on additional group business at attractive rates” – Justin Knight .
“We…entered into a new term loan facility with a principal amount of $385 million…repay[ing] all amounts outstanding under [the] $225 million term loan” – Company disclosure .
“During Q2…purchased ~1.4 million shares…$16.9 million; total YTD through June ~3.4 million…$43.2 million” – Company disclosure .

Q&A Highlights

Guidance path: Management reduced FY25 ranges based on current booking position; Q2 seen as trough; implied back-half roughly flat to +1% RevPAR with potential upside if pickup improves .
Group strategy: Near-term group at attractive ADR has been additive and did not dilute RevPAR; focus on “right group at the right rate” .
Booking cadence: July positive; August/September bookings down YoY; October up and may offset September weakness (holiday shift) .
Capital allocation: Expect continued opportunistic asset sales (smaller deals) to fund buybacks given private/public valuation arbitrage; pursuing Nashville via balance sheet, with potential 1031 exchanges .
Cost controls: Variable expense growth moderating; contract labor down; fixed costs (taxes/insurance) still a headwind; margin management remains a focus .

Estimates Context

Q2 2025 results modestly beat S&P Global consensus: EPS $0.27 vs $0.265*, Revenue $384.37M vs $381.18M*, EBITDA $132.98M vs $131.92M* .
Directionally, small beats across all three metrics suggest operational execution (mix optimization, group ADR) offsetting occupancy softness and fixed-cost pressure .