Executive Summary

Q1 2025 delivered modest top-line growth and better-than-expected EBITDA, with Portfolio Comparable RevPAR up 1.6% (ADR +2.1%, occupancy -0.5 pts) and Adjusted EBITDA of $77.6M; management cited urban-market strength and conversions as key drivers .
Revenue of $328.1M grew 1.1% YoY and modestly beat consensus ($328.1M vs $327.3M); GAAP EPS of -$0.02 was better than consensus (-$0.02 vs -$0.046) as non-operating items and cost control helped the print; the quarter exceeded the prior EBITDA outlook’s high end according to management .
Guidance was lowered across key metrics to reflect a softer macro and shorter booking windows: FY Comparable RevPAR growth: -1% to +1% (from +1% to +3%); Comparable Hotel EBITDA: $365.5M–$395.5M (from $378.0M–$408.0M); Adjusted EBITDA: $332.5M–$362.5M (from $345.0M–$375.0M); Adjusted FFO/share: $1.38–$1.58 (from $1.46–$1.66) .
Capital allocation and balance sheet actions were supportive: $24.3M of YTD buybacks funded by asset recycling, a new $300M term loan extended maturities to 2030, and all 2025 maturities addressed; liquidity stood at ~$0.85B with $2.2B debt outstanding .

What Went Well and What Went Wrong

What Went Well
- Urban portfolio resilience: Urban RevPAR +3.6% with weekday urban RevPAR +4.9%, aided by return-to-office and strong large events; conversions delivered outsized RevPAR gains (initial six +14%; Nashville +16%; three recent conversions +35%) .
- Cost control and margins: Hotel operating cost growth moderated to 2.9%; Hotel EBITDA margin only -124 bps YoY despite fewer one-time credits and one less day vs last year .
- Balance sheet and capital allocation: Term loan upsized to $300M with maturity to 2030, revolver repaid; $24.3M buybacks at $8.91 funded by non-core sale at 18x 2025 Hotel EBITDA .
- Quote: “Our ability to drive rate in this environment and control costs allowed us to exceed our EBITDA outlook.” — Leslie D. Hale .
What Went Wrong
- Macro-driven demand softness: March RevPAR -1.3% and April prelim -1% to -2%; government and international demand softened, booking windows shortened materially .
- Guidance reset: FY ranges cut across RevPAR, EBITDA, and FFO/share; midpoint now assumes current headwinds persist through year .
- Margin compression: Comparable Hotel EBITDA margin declined to 26.1% from 27.3% YoY; comparable Hotel EBITDA down $3.0M YoY (to $85.3M) amid the demand mix and lapping one-time credits .

Financial Results

P&L and Key REIT Metrics

Metric	Q3 2024	Q4 2024	Q1 2025
Total Revenues ($USD Millions)	$345.7	$330.0	$328.1
Comparable Hotel EBITDA ($USD Millions)	$100.7	$90.4	$85.3
Comparable Hotel EBITDA Margin (%)	29.2%	27.4%	26.1%
Adjusted EBITDA ($USD Millions)	$91.9	$81.1	$77.6
Adjusted FFO per Diluted Share ($)	$0.40	$0.33	$0.31
GAAP EPS (Diluted, $)	$0.09	-$0.01	-$0.02

Operational KPIs (YoY basis)

KPI	Q1 2024	Q1 2025
Comparable ADR ($)	$200.07	$204.31
Comparable Occupancy (%)	69.5%	69.1%
Comparable RevPAR ($)	$138.97	$141.23

Segment Revenue Breakdown (Q1)

Category ($USD Thousands)	Q1 2024	Q1 2025
Room Revenue	$266,630	$267,654
Food & Beverage Revenue	$35,689	$37,513
Other Revenue	$22,091	$22,952
Total Revenues	$324,410	$328,119

Actuals vs Wall Street Consensus (S&P Global)

Metric	Consensus	Actual	# of Estimates
Revenue ($USD)	$327,261,650*	$328,300,000*	8*
GAAP EPS ($)	-$0.04616*	-$0.0151*	5*

Values retrieved from S&P Global.*
Note: Company-reported revenue was $328,119,000 and GAAP diluted EPS was -$0.02 .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Comparable RevPAR Growth	FY 2025	+1.0% to +3.0%	-1.0% to +1.0%	Lowered
Comparable Hotel EBITDA ($M)	FY 2025	$378.0 to $408.0	$365.5 to $395.5	Lowered
Adjusted EBITDA ($M)	FY 2025	$345.0 to $375.0	$332.5 to $362.5	Lowered
Adjusted FFO per Diluted Share ($)	FY 2025	$1.46 to $1.66	$1.38 to $1.58	Lowered
Net Interest Expense ($M)	FY 2025	$94.0 to $96.0	$94.0 to $96.0	Maintained
Cash Corporate G&A ($M)	FY 2025	$34.0 to $35.0	$34.0 to $35.0	Maintained
Capex – Renovations ($M)	FY 2025	$80.0 to $100.0	$80.0 to $100.0	Maintained
Diluted Shares & Units (M)	FY 2025	152.5	151.5	Lower (buybacks)

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2: Q4 2024; Q-1: Q3 2024)	Current Period (Q1 2025)	Trend
Macro/Visibility & Booking Window	Positive momentum; reaffirmed FY outlook; noted balanced demand across segments .	Visibility reduced; booking window shortened (0–7 days now ~58% vs ~51% historically) .	Deteriorating near term
Government & International Demand	Strength in urban, broad-based demand .	Government (~3% of rev) and international (<3%) soft; cancellations concentrated in Mar/Apr .	Softer
Urban Markets & SF/Northern CA	Urban outperformance, term loan raised; dividend increased .	Urban RevPAR +3.6%; SF momentum from citywide calendar, AI conferences, back-to-office .	Improving in SF
Conversions/Capex Execution	Multiple conversions completed; strong ramp .	Strong performance: +14% (initial six), +16% Nashville, +35% in Houston/New Orleans/Pittsburgh .	Positive
Tariffs/Supply Chain & FF&E	N/A prior explicit detail.	FF&E ~40% of renovation costs; diversified to ~10% China (down from ~40% pre-COVID), mitigating tariff risk .	Managed risk
Capital Allocation & Balance Sheet	New $500M term loan; repaid revolver; dividend up 50% .	New $300M term loan, revolver repaid; $24.3M YTD buybacks; $250M repurchase authorization .	Proactive/liquidity strong

Management Commentary

Strategic positioning: “Our diversified urban-centric portfolio… and lean operating model… allow us to stay resilient on both our top and bottom line performance.” — Leslie D. Hale .
Outlook and guidance rationale: “Fundamentals have moderated… uncertainty persists… we are adjusting our full year guidance to reflect our current outlook.” — Leslie D. Hale .
Cost and margin discipline: “Total hotel operating cost growth was only 2.9%… margin performance… only 124 bps lower YoY.” — Sean Mahoney .
Capital actions: “Entered into a new $300 million term loan… used excess proceeds to fully repay $100 million on our line of credit.” — Sean Mahoney .
Asset recycling: “Sold a noncore asset at an attractive 18x multiple and redeployed proceeds into accretive share repurchases.” — Leslie D. Hale .

Q&A Highlights

Near-term trends: March RevPAR -1.3%; April prelim -1% to -2%; rate integrity held (+1% in March) despite softer demand .
Financing markets: Bank market supportive; high yield costs ~50–75 bps wider vs earlier in year; CMBS functioning but more fickle amid uncertainty .
Group dynamics: FY group pace ~102% with ~77% on the books; F&B spend healthy, attrition collected, improving F&B margin by ~250 bps .
Tariff exposure: FF&E ~40% of renovation costs; only ~10% sourced from China vs ~40% pre-COVID; mitigated via diversification .
Transactions: Market in “pause/wait-and-see” for assets not under contract; buybacks prioritized in current backdrop .

Estimates Context

Q1 2025 beat on both revenue and EPS: Revenue $328.3M vs $327.3M consensus; GAAP EPS -$0.015 vs -$0.046 consensus; estimate counts: revenue (8), EPS (5). Values retrieved from S&P Global.*
Implications: Expect modest downward revisions to FY RevPAR/EBITDA/FFO following guidance reset; however, conversion outperformance and urban strength may support out-of-room revenue and margin stability into H2 if macro stabilizes .

Key Takeaways for Investors

Guidance reset reflects macro caution and shorter booking windows; second quarter likely weakest, with back half expected roughly flat on RevPAR absent macro improvement .
Urban-centric exposure and conversions are outperforming, providing relative resilience; SF/Northern CA trajectory improving with citywide and AI-led corporate events .
Balance sheet flexibility is strong: maturities extended to 2030, revolver repaid, $0.85B liquidity; ~75% of debt fixed/hedged, weighted avg rate ~4.5% .
Capital returns are active and leverage-neutral via recycling: $24.3M YTD buybacks and a new $250M authorization provide downside support in volatile markets .
Expect analysts to lower FY EBITDA/FFO targets inline with the updated ranges; watch for any stabilization in government and international segments and booking window normalization .
Near-term trading: The guide-down is a negative catalyst; potential offsets include continued conversion ramp and urban demand strength; volatility likely around monthly demand reads (Mar/Apr softness) .
Medium-term thesis: Urban demand tailwinds, constrained new supply, and revenue management discipline underpin rate integrity; RLJ’s portfolio/operating model should compound value as macro clarity improves .

Additional Q1 2025 items: Quarterly dividend declared ($0.15 common; $0.4875 preferred) and CFO retirement announced (May transition), both communicated during the period .

RLJ Lodging Trust (RLJ)·Q1 2025 Earnings Summary