RLJ

Image source: The Motley Fool. Friday, Aug. 7, 2026 at 12:00 p.m. ET Director of Investor Relations - John Paul Austin President and Chief Executive Officer - Leslie D. Hale Chief Financial Officer - Nikhil Bhalla Chief Operating Officer - Tom Bardenett Operator: Please stand by. The conference will start soon. Please standby. The conference will start soon. Greetings, and welcome to the RLJ Lodging Trust Second Quarter 26 Earnings Call. At this time, all only a question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. I will now turn the conference over to John Paul Austin, Director of Investor Relations. John Paul Austin: Thank you, John. You may begin. Operator: Thank you, operator. John Paul Austin: Good afternoon, and welcome to RLJ Lodging Trust 26 second quarter earnings call. On today's call, Leslie D. Hale, our President and Chief Executive Officer, will discuss key highlights for the quarter. Nikhil Bhalla, our Chief Financial Officer, will discuss the company's financial results. Tom Bardenett, our Chief Operating Officer, will also be available for Q&A. Forward looking statements made on this call are subject to numerous risks, uncertainties that may lead the company's actual results to differ materially from what had been communicated. Factors that may impact the results of the company can be found in the company's 10-Q and other reports filed with the SEC. The company undertakes no obligation to update forward looking statements. Also, as we discuss certain non GAAP measures, may be helpful to review the reconciliations to GAAP located in our press release. Finally, please refer to the schedule of supplemental information includes pro forma operating results for our current hotel portfolio. I will now turn the call over to Leslie. Leslie D. Hale: Thanks, John Paul. Good afternoon, everyone, and thank you for joining us today. We are pleased to report strong second quarter results, which exceeded our expectations. Our operating performance reflects broad based growth across our entire portfolio, as well as the successful ramp of our renovations and conversions. We continue to benefit from the momentum in lodging fundamentals. Which are being led by the acceleration of business travel and robust demand around urban leisure experiences, both of which align with our portfolio's overall positioning. Against this positive backdrop, during the quarter, our RevPAR growth outperformed the industry by 110 basis points. With all of our markets delivering results ahead of our expectations. Our out-of-room spend once again exceeded our RevPAR growth. We delivered high single digit EBITDA growth with positive margin improvement. And we completed the transformative conversion of our new autograph collection asset. Further bolstering our lifestyle orientation. The broad based nature of the growth across markets and demand segments year to date is demonstrating that the strength we are seeing is durable, and not reliant on any individual market or event. These industry tailwinds continue to disproportionately favor urban markets. Which are benefiting from diverse demand drivers and an extended period of muted supply growth. Our urban centric portfolio is well positioned to capture these tailwinds, which combined with the upside we are seeing from our capital investments, gives us conviction in our ability to continue delivering strong relative performance. With respect to our operating performance, during the quarter, we achieved RevPAR growth of 6.8%. Driven by ADR growth of 4.9%. We also saw a healthy 130 basis point increase in occupancy which was better than we had expected. Reflecting the acceleration in demand we are seeing in the short-term booking window. Each month of the quarter achieved positive RevPAR growth. With June being the strongest month. up 12%. We were encouraged to see these positive trends carry into July with preliminary RevPAR growth approaching 11%. With regard to the World Cup, the performance of our host markets came in line with our expectations. As we successfully executed on our revenue management strategy of intentionally building a base of high certainty demand from teams, media, and sponsors, while reserving sufficient inventory to capture the transient pickup that materialized closer to the matches. This strategy performed as anticipated by amplifying rate growth. More importantly, beyond the World Cup, we were very encouraged by the broad based momentum and fundamentals we saw across the entire portfolio. With our non World Cup markets achieving RevPAR growth of 6.2% and several of these markets delivering double digit RevPAR growth during the second quarter. Among these Austin was a notable outperformer. With RevPAR increasing 17% year-over-year benefiting from strong in-house group. Other notable markets included Chicago, which saw RevPAR increase by 15%, driven by a strong citywide calendar. And Tampa, which grew RevPAR by 11% benefiting from a healthy event calendar. We also had a number of other markets such as Orlando, Charleston, and DC that produced high single digit RevPAR growth all supported by broad based improvements in segmentation. Additionally, we remain encouraged by the recovery underway in Northern California. With RevPAR growing 9% during the second quarter. While the market benefited from hosting World Cup matches, its performance continues to be primarily driven by the ongoing expansion of the AI industry, which is fueling corporate investment and business travel. Against the backdrop of a more constructive local environment. Giving us confidence in a positive multiyear trajectory of this market's recovery. As it relates to segmentation, business transient revenues continue to accelerate increasing by a robust 10%. This increase was led by demand growth of 6%, with the rate increasing by 4%. Reflecting ongoing pricing power as our highest rated customer continues to increase their travel. The acceleration in BT is supported by elevated levels of business investment and earnings growth broadly across many industries, including tech, finance, health care and defense. Encouragingly, we continue to observe strong demand among both large corporates as well as small and medium sized businesses. As expected, the leisure segment performed well in the second quarter, with revenues increasing by 7%, as pricing improved meaningfully with a 6% increase in rate while demand remained healthy with a 1% increase in room nights. Our hotels and live work play locations continue to benefit broadly from strong urban leisure trends. Reflecting the ongoing shift in consumer preferences toward urban entertainment. Which was aided by the World Cup during the second quarter. With respect to group, our revenues grew 6% during the quarter. Balanced evenly between demand and ADR. While the booking window remained short, near term demand is continuing to materialize. As demonstrated by our end of quarter, for the quarter group pace, improving by 300 basis points during the second quarter, We were also pleased to see a meaningful pickup in our booking pace for the third quarter. Which is now pacing at 110% of last year. Additionally, we are encouraged by the growing share of corporate demand within our group mix, which is contributing to our high ADR and non-room revenues. The strength we are seeing across each of our demand segments continues to have positive implications for our auto room spend. Which grew by 7% during the second quarter. These results once again underscore the success of our ROI initiative as well as our renovations and conversions. Aimed at growing food and beverage profitably reconcepting underutilized space, and growing other ancillary revenues. This strong top line performance translated into EBITDA growth of 7%. During the quarter, our occupancy growth exceeded our expectations. And as a result, expense growth was higher than anticipated. Although we still were able to achieve margin improvement. Now with regard to capital allocation, the successful execution of our investments in our portfolio are unlocking value and is clearly evident in our performance. During the second quarter, our 4 high impact renovations completed last year achieved 22% revenue growth and 50% EBITDA growth while our 7 previously completed conversions achieved revenue growth of 8% and EBITDA growth of 12%. These results continue to reinforce our conviction the investments we are making in our assets and contributed to our outperformance During the quarter, we completed the conversion of a former Renaissance in Pittsburgh, relaunching the hotel as the Arrott under Marriott's Autograph Collection. The name Arrott pays tribute to the original architect who designed the iconic building that opened in 1.9 thousand. Our comprehensive renovation reimagined all public spaces and guest rooms and activated revenue generating spaces to leverage the character of this historic asset. This included the addition of a drafting room, which is the hotel's signature restaurant and bar. The addition of the Fulton Room, A New Premium Function Space, And The Activation Of The Hotel's Historic Rotunda, Which Now Hosts A Light Show Showcasing Pittsburgh's rich history. We are also excited to announce that we will be adding Margaritaville to our family of brand affiliations. By converting our Fairfield Inn and Suites Key West to Compass by Margaritaville. The Margaritaville Lifestyle Orientation Strong Recognition Among Leisure Travelers, And Its Origin In Key West. Make it a natural fit in 1 of the highest ADR markets in the country. The reimagination of this asset will allow us to capture higher rated leisure demand. While creating opportunities to drive ancillary revenue growth. Our repositioning will reimagine the property into an island resort with new themed inspired concepts, including 5 O'Clock Somewhere, a new poolside Cabana Bar, That Will Tie In The Aesthetics And Spirit Of Key West with live music and immersive F&B. We plan to initiate the conversion later this year and relaunch in 2027. And finally, we made progress towards initiating the physical renovation at our Wyndham Boston which will join Hilton's Tapestry Collection. With each of these conversions, we continue to increase our exposure to the lifestyle segment and evolving consumer trends. These repositionings are also consistent with our broader strategy of creating opportunities to drive high-margin out-of-room spend with thoughtful execution that allows us to attract customers beyond our hotel guest. In addition to advancing our internal growth pipeline, we remain an active portfolio manager and opportunistically sold a hotel at a highly accretive basis during the quarter. Overall, our strong balance sheet and liquidity continues to position us to drive growth this year and beyond. Now turning to our outlook. While there is considerable geopolitical uncertainty and limited visibility, we are raising our outlook for the full year to reflect our strong second quarter performance and the ongoing positive trends. As we enter the second half of the year, we remain optimistic that a resilient economy and consumer preferences that favor urban leisure experiences will continue to drive healthy demand against a backdrop of muted supply growth. As such, our outlook for the remainder of the year assumes the continuation of tailwinds that have supported our performance thus far. Including sustained momentum in the recovery of business travel, leisure demand remaining healthy, especially in urban markets, Positive group revenue pace. Continued strength of in-the-quarter-for-the-quarter bookings, and additional tailwinds from the continued ramp of our conversions. As we move into the second half of 26, we expect the incremental contribution from demand growth to continue. As evidenced by July seeing 300 basis points of occupancy growth resulting in slightly higher expense growth moving forward than we had anticipated in our prior outlook. Overall, our first half outperformance is a direct reflection of our positioning in urban markets, which are benefiting from the momentum in BT and a recurring calendar of sports concerts, festivals, conventions, and other events that draw travelers into urban markets year over year. These factors, along with embedded growth from our capital investments, and the resiliency of the broader economy, give us confidence in our ability to deliver strong relative performance for the remainder of the year. That said, we remain mindful that visibility is limited given the short booking window and the evolving macro backdrop. And we will continue to monitor for any shifts in demand as the year progresses. As we look to 2027, the setup is favorable, with sustained strength expected from the underlying demand trends particularly as it relates to BT. A favorable holiday calendar, the rotation of major events within urban markets, such as the Super Bowl, the NCAA tournament, the NFL draft, Formula 1, and pre Olympic activity and the ongoing recovery in Northern California. All of which will occur against a constrained supply backdrop. Overall, we are pleased with the setup leading into next year. With that, I will now turn the call over to Nikhil. Nikhil Bhalla: Thanks, Leslie. To start, our comparable numbers include our 91 hotels owned at the end of the second quarter, Our reported corporate adjusted EBITDA and AFFO include operating results from all sold hotels during RLJ's ownership period. We were pleased with our second quarter results that came in significantly ahead of our expectations, and outperformed relative to the industry. Our second quarter RevPAR of $167 increased by 6.8% versus the prior year. Led by average daily rate increasing by 4.9% to $217 and occupancy increasing ahead of our expectations at 77%, An increase of 130 basis points. RevPAR growth in April actualized at 5.8% May came in at a healthy 2.5% despite difficult comps. And June achieved an impressive 12.4% RevPAR growth. Driven by strong fundamentals and further aided by the World Cup. Our urban markets once again achieved strong RevPAR growth. Benefiting from accelerating business travel which saw revenues increase by a robust 10% during the second quarter. Building on the 9% growth we achieved in the first quarter, A number of our urban markets saw double digit BT revenue growth. Including Chicago and DC, which grew by 35% each New York, which was up 17%, Houston up 13%, Northern California up 12%, and South Florida up 10%. In addition to capturing solid BD trends, which was evident in the 6.3% increase in our weekday revenues, our portfolio also benefited from strong urban leisure demand. Which led weekend revenues to grow by 8.1%. Once again demonstrating our portfolio's ideal positioning to benefit from 7-day-a-week demand. The strength in our urban markets contributed to the outsized growth of our nonroom revenues by leveraging the investments we have made in our ROI initiatives. These investments allowed our out-of-room spend to increase by 7.1% or 30 basis points ahead of our RevPAR performance. Our strong top line growth allowed us to flow results to the bottom line, highlighting the benefits of our lean operating model and allowed us to grow hotel EBITDA by 7%. Despite higher operating costs. On a per occupied room basis, expenses increased by 4.9% largely reflecting variable expense growth associated with a higher transient mix. This drove increased credit card and travel agent commission fees as well as greater spend in F&B outlets which carry a higher expense load. Additionally, energy costs remained elevated. Our fixed costs increased by 6.4%, primarily due to the impact of a tax refund recognized in the prior year. Excluding that prior year tax benefit, fixed cost would have increased just 3.4%. For the second quarter, our portfolio achieved hotel EBITDA of $119.5 million representing year over year growth of $8 million or 7.1%. And hotel EBITDA margins of 31.3%. Which improved by 10 basis points over the prior year. Or 40 basis points without the prior year tax benefit. These results translated to adjusted EBITDA of $110.4 million and adjusted FFO per diluted share of $0.52 Turning to our balance sheet. At the end of the second quarter, we drew down proceeds under the delayed draw feature of the term loans executed earlier this year to pay off our senior notes that matured on July 1st. Subsequent to this repayment, we have $2.2 billion of debt. And no maturities due until 2029. Overall, our balance sheet remains well positioned with solid liquidity of approximately $1 billion including $600 million of undrawn capacity on our corporate revolver. 83 of our 91 hotels are unencumbered by debt an attractive weighted average interest rate of 4.8%, and 72% of our debt either fixed or hedged. At the end of the second quarter. With respect to capital allocation, during the quarter, we opportunistically sold 1 hotel at a highly accretive multiple of 29.2x hotel EBITDA. Including required capital expenditures. Additionally, we are unlocking embedded portfolio value and further enhancing our lifestyle orientation as we execute our high value conversions in Pittsburgh, Boston, and the addition of Margaritaville to our brand portfolio in Key West. While remaining committed to returning capital to shareholders through a well covered dividend of $0.15 per share. We will continue to make prudent capital allocation decisions to position our portfolio to drive growth. While maintaining a strong and flexible balance sheet. Turning to our full year outlook. Our updated guidance reflects the sale of the Hyatt Place Fremont Silicon Valley, Our strong second quarter outperformance and the continuation of the current operating and macroeconomic environment. For 2026, we now expect comparable RevPAR growth to range between 3.5% to 4.5%. Comparable hotel EBITDA range between $369 million and $389 million Corporate adjusted EBITDA range between $336 million and $356 million and adjusted FFO per diluted share to be between $1.37 and $1.50 Our outlook assumes no additional acquisitions, dispositions, or balance sheet activity beyond what has been completed today. We continue to estimate capital expenditures, will be in the range of $80 million to $90 million Cash G&A will be in the range of $33.5 million to $34.5 million and expect net interest expense will be in the range of $101 million to $103 million We also expect the relationship between top line growth and expense growth during the second half to be similar to the first half of this year. With respect to the cadence for the remainder of the year, we expect our third quarter performance to be stronger than the fourth quarter. As such, we expect the contribution of adjusted EBITDA for the third quarter to be about 100 basis points higher than last year's third quarter. Finally, please refer to our press release from last evening for additional details on our outlook. And to our schedule of supplemental information which will include comparable 2026 and 2025 quarterly operating results for our 91-hotel portfolio. Thank you. And this concludes our prepared remarks. We will now open the line for Q&A. Operator? Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press 2 if you would like to remove your question from the queue. For portions of the conference, please press the star key. 1 moment please while we poll for questions. Thank you. Our first question comes from the line of Michael Bellisario with Baird. Please proceed. Michael Bellisario: Thanks. Good afternoon, everyone. Afternoon. I wanna ask on the BT that you referenced, are you seeing this demand come through the GDS, or is it more local negotiated accounts? And then any specific industries and notable booking patterns to call out would be helpful. Thank you. Leslie D. Hale: Yeah, hey, Mike. The strength on BT, I think it is important to point out. I mean, this is the second consecutive quarter that we saw BT revenues increased by 10%. And room nights were up 6% in the second quarter, which I think is an important data point. We also saw midweek trends up 6%, and it is really been broad based. As Nikhil mentioned, were a number of markets that saw double digit growth in BT. And it is coming from our national accounts in GDS and it is industries like tech, you know, finance, defense. I am also remind you that this is our highest rated customer who is coming back. So this is benefiting us on rate and also benefiting us in, in F&B as well. So we feel really good about the strength we are seeing in BT and the ability for it to continue. Thomas J. Bardenett: Only other thing I would offer, Mike, is it is increasing in the total mix when we think about transient. It moved up another 1% because of the demand that Leslie was talking about in regards to room nights. And we are also getting the average rate increases based on the RFP season with success from last year. The other thing that I would add too is when you think about where they are booking through and your spot on the GDS side, that also increased from a percentage standpoint, as Leslie stated, which is encouraging because that is where that channel tends to book the clientele that travels from a BT standpoint. Michael Bellisario: that is helpful. And then just my follow-up on margins and flow through. And sort of asking this ex some of the onetime items that you noted, but how are you thinking about sort of the underlying growth run rate for both fixed and variable expenses on a go forward basis? And that is all for me. Thank you. Leslie D. Hale: Yes, let me sort of frame the second quarter expense growth. As Nikhil mentioned, our fixed expenses were up 6.4%. If you adjust that for taxes, it is 3.5% a POR perspective, we were up 4.9%. And there is a couple of things that are sort of driving that. 1, we had higher occupancy than we had anticipated. And with higher occupancy growth versus rate growth, there is a higher cost associated with that. Additionally, we had higher transient contribution And with that, you have higher transaction costs, such as TA and credit card revenue related costs that Nikhil mentioned. Additionally, we had a shorter length of stay this quarter which has higher checkouts. And so with a portfolio of 50% suites, that has some level of impact. And I would also say that the transient mix we had this quarter had a higher spend within our F&B outlets as opposed to our banquets, and outlets have a higher expense load relative to the banquet F&B. So that was a little different this quarter as well. And then lastly, there is 2 other things worth noting. 1 is that because we have better performance year to date, you know, we did have some bonus accruals at the properties for the staff. In addition to the energy costs that Nikhil mentioned as well. So when we look at expense growth for the back half of the year, our guidance implies 3% at the midpoint and 4% at the top end. So there is a deceleration from the second quarter. Very helpful. Thank you. Operator: Thank you. Our next question comes from the line of Austin Wurschmidt with KeyBanc Capital Markets. Please proceed. Austin Wurschmidt: Great. Thanks. Good afternoon. Leslie, appreciate all the details you gave on July. I guess as you look forward, though, I mean, you talk a little bit about the booking pace for the months ahead and just how you are thinking about the relative performance between the 3 business segments given the strength, especially, that you are seeing within BT? Leslie D. Hale: Yeah, sure, Austin. I would say that our change in guidance reflects 2 things. 1 is a change, obviously reflects the better performance in second quarter, but also assumes an improvement in the back of the year. And that improvement is being driven by the continued strength of BT remaining strong in terms of who is traveling, the frequency and the length of stay related to that demand that we just talked about. We expect leisure demand to remain healthy. We expect group to actualize at its current pace. We are looking at, you know, pace for about a 104% for the full year, 110% in the third quarter. And all of those segments are going to benefit urban markets. And keep in mind that we still expect our renovations and our conversions to continue to ramp. And I think about the back half of the year from a cadence perspective, as Nikhil mentioned, we expect third quarter to be better than fourth quarter. But if I were to break that down, third quarter is obviously off to a strong start with July being up 11%. I would say August is expected to be relatively flat. And September is gonna benefit from the Salesforce, but we do have labor days later in that month. And when I think about the fourth quarter, we see that because Salesforce shifted, our pace for the fourth quarter is actually down year over year. And while we do expect to benefit from the lapse of the government shutdown, it will be offset by the election. The other thing that I would point out for us in the back half of the year is that we are starting our conversion renovations for Boston and Key West. I think it is important to understand that we believe that fundamentals remain healthy and that fundamentals are keeping with the momentum we see today. But there are some puts and takes on the back half that from a timing perspective of how things shifted. And so October being significant contribution month for the fourth quarter, the pace in that month is down because Salesforce moved from October to September. And so we still believe that, you know, BT is going to continue to show good strength. Austin Wurschmidt: I appreciate all the details there. And then just some clarifications on the expense side. Did you say 3% expense for the full year? And is that total expense or on a per occupied room basis? And what does the back half assume for expenses on a per occupied room basis? Thank you. Nikhil Bhalla: Yes, and just to clarify, that implied 3% was for the back half of the year, Austin, from that. And so it was implied 3% for the back half of the year. At the midpoint and implied 4% for the back half of the year at the high end of guidance. That answer your question? Austin Wurschmidt: Is that total expense growth on a year over year basis or per occupied room basis? Nikhil Bhalla: That is total expense. Per occupied room basis, Austin, it is going to be very similar to that. Great. Thank you. Operator: Thank you. Our next question comes from the line of Gregory Miller with Truist Securities. Please proceed. Gregory Miller: Thank you. Good afternoon, everybody. I would like to start off with the Compass Key West conversion. it is interesting to hear. Personally do not know as much about the brand as well. I think perhaps that is the same for some of the listeners and my knowledge learned that many of them have compared to the core brand Margaritaville. Leslie D. Hale: Hey, Gregory. Hi, Gregory. We cannot hear you. Gregory Miller: You are-- you got your-- you are very muddled. I apologize. I will try to call back in. Sorry about that. Operator: Okay. All right. Thank you. Our next question comes from the line of Rich Hightower with Barclays. Please proceed. Analyst: Hi, thanks very much for taking the question. You announced a $250 million share repurchase authorization earlier this year. So I was just kind of wondering if you could give some color on how you are currently thinking about share repurchases relative to acquisitions or disposition activity. Leslie D. Hale: Yes, sure. Good afternoon. Look, we are always focused on optimizing the tools that we have. To drive shareholder value. And we are very pleased with where our balance sheet sits today, particularly after we have addressed our maturing bonds. Most recently, and we have ample liquidity. The strong results that we are seeing from our high impact renovations and our conversions are delivering strong results, are demonstrating the effectiveness of the investments we have made. Keep in mind for our high impact renovations grew EBITDA by 50% this quarter. For conversions, we grew EBITDA by 11%. You know, we are excited about the next 2 conversions that we have. Down the pipe, and we are also excited about how the Arrott is going to ramp up. At the same time, you know, we continue to believe that our stock is undervalued. And we remain constructive on the transaction side and we expect to continue to be active on all of them with dispositions. And so our balance sheet gives us optionality to look at all of these tools and exercise them the right window. We are gonna continue to be disciplined. Thanks very much. Operator: Thank you. Our next question comes from the line of Chris Darling with Green Street Capital. Please proceed. Analyst: Just maybe speaking of the transaction market, we have seen pretty strong pricing at the top end of the market. I am curious if you can discuss how pricing has evolved in the more select service or you know, your segment of the business and if that gives you more opportunity as a seller. To, effectuate transactions. Leslie D. Hale: Yes, look, I would say that we are in a place where pricing is asset by asset, case by case basis. What I would say about the overall transaction market is that it is more constructive today in that there are more transactions in the pipeline I would say that the debt market continues to be very competitive with a number of capital providers. there is better fundamentals, is allowing potential buyers to underwrite with more conviction. The buyer pool has widened today, particularly as performance continues to improve. And we are seeing, owner-operators continue to play a role in the transaction market. We are also starting to see family and a little bit of private equity as well. And so it is still focused on single assets, as opposed to portfolios. But we do see the overall transaction market improving. But I would generally say that we are starting to sort of see pricing converge, and it is really to a case by case basis in this climate. You know, we recently sold, as you mentioned, you know, an asset in Fremont, and that was an asset where the dynamics of that market had moved away from its trajectory from the rest of what is happening in Northern California. And the pending capital did not make sense for us. And so we ran a small process and we had a regional operator pay a multiple on that existing asset. Understood. And maybe just a follow-up on the conversion opportunities. I am just curious to understand where you guys are in the window in San Diego. Assuming, you know, the Margaritaville conversion does not preclude any, conversion in conversion at that asset, Is there any, you know, advancement with that property or are there other conversion opportunities that you have had identified, in recent months? Mean, we have a healthy pipeline of conversions. We have and continue to be on a pace of delivering 2 conversions per year. And with the announcement of Key West, we are continuing down that path. Super excited about the Margaritaville, which I am going to let Tom talk related to your specific question on San Diego, what I would say is that we are making great progress on that and working with the port. We are in the process of executing, a, our extension. Part of that process is around finalizing our design of the transformative repositioning of that asset, and, you know, we expect to make meaningful progress through the balance of the remainder of the year in San Diego. Thomas J. Bardenett: And just to give a little bit more color on Key West because we are excited, obviously, of making that announcement today. This is 1 of the highest ADR markets in the country. And it is the most iconic island destination if you think about South Florida. And the origins of Key West are perfect for Margaritaville because that is where they opened their first store and restaurant a while ago. So we are excited about bringing another asset into that lifestyle consumer that is attracted to that. And as Leslie described in her prepared remarks, when you arrive at this hotel, you are going to have the opportunity to be greeted by the Provisions Marketplace and gives everybody really a license to chill. The diverse food and beverage offerings, I think that is where Gregory was probably going in regards to just, you know, what are the deliverables of this Margaritaville. it is really like a sunny side up complimentary made to order breakfast in the morning. Then when you get into the afternoon, we are really excited about a featured cabana bar called 5 O'Clock Somewhere. With an expanded pool and entertainment concept that really will elevate the experience. And so we are most excited about the fact that it is a family of brands. Margaritaville has done a great job with restaurants, resorts, vacation club, residential real estate, vacation homes. And even the cruise line at the port of call going down to Key West. So we believe not only for our guests who will be coming in to enjoy it, but we think the locals will really enjoy the chance to have an opportunity to experience this hotel in Key West because there is really a lack of supply there. And we are really excited about the opportunity to grow rate and profitability at this asset. Leslie D. Hale: I would just add on that, obviously, Tom mentioned a number of thoughtful F&B ideas that we are going be executing on with Margaritaville. But that is just a continuation of the strategy that we have had across all of our conversions. We talked about before Mills House, Mandalay Beach, and Monica, all of which are contributing to the 7% out-of-room spend that we achieved this past quarter. Tom just mentioned what we are doing in Key West in terms of the pool bar. I remind you that in Boston, we are going to be opening the archive and in Pittsburgh, the drafting room, and the Fulton premium lounge that we are gonna have there as well. All of these, you know, extra aligned with our strategy of being able to have thoughtful F&B that is that is fabric centric, and that not only attracts guests that are in our hotel, but it also attracts guests that are outside of our hotel. And that is contributing to the strong, outer room spend that we have had for consecutive quarters now. Analyst: Appreciate the thoughts. Thank you. Operator: Thank you. Our next question comes from the line of Floris Van Dijkum with Ladenburg Thalmann. Please proceed. Analyst: Hey. I am excited to go test out your Margaritaville. Offering once it gets completed. I am just curious. Can you quantify the capital that you plan to spend? And I think you have historically, you know, averaged you know, something along the lines of north of 20% returns on those conversion projects. Maybe if you can give us a little bit more of a financial impact. And how much, because Margaritaville assets are unique, and they are, you know, particularly their alcohol sales are just off the charts. How much are you factoring in there, and how will this asset compete with the DiamondRock hotel that is not that far away. it is also a Margaritaville. Leslie D. Hale: Yeah, I would generally say that the way that we thought about the returns is a function of return on the capital that we are putting in that is incremental in order to convert the assets. We generally have achieved returns that are north of 40% relative to the incremental capital. What I would also say is we have also pointed out the EBITDA growth across the assets. We have talked about previously in Boston, we think there is 40% upside on the EBITDA of that asset. I would say in Key West, we think there is about a 50% upside in the EBITDA of that asset given that Tom mentioned sort of how high rated that market is and the opportunity to up brand in this particular asset. I would also say in Pittsburgh, we think there is 35% upside in that EBITDA. And, you know, keep in mind the rates that we have demonstrated on these 7 assets we have already completed. So we feel very good about the return on the capital that we are investing, you know, in these in these assets. Thomas J. Bardenett: And, Floris, I know we have spent some time in Key West. So you know exactly where the location is. it is on the way to Duval. We are a lot of the activity is. And we truly believe, you know, understanding the island experience and to your point about the other Margaritaville, think we will be able to tuck underneath based on our location compared to the other 1. And most importantly, because of the experience we are going to have around the pool, as well as the beverage experience, we think locals are gonna be really attracted to this, because there is just not a lot of supply, which is why the average rate, if you can believe it, almost mirrors New York City's average rates in regards to what happens down here. On an annual basis. So we are pleased to know that this can take us to a different level within the lifestyle consumer And certainly Margaritaville is what everybody Googles when you go to Key West in regards to the atmosphere and what you are looking for. Analyst: No, I am looking forward to my next trip out there with you with you, Tom. I think that will be fun. But to the point about and, Leslie, I appreciate your returns are have been, you know, exceptionally high on the on these redevelopments. Is there any thoughts from you to do more than 2 projects a year because, you know, frankly, the returns are so attractive? Leslie D. Hale: Yes, I would say we have tried to be thoughtful to make sure that we manage the displacement that is caused by these. We also look at the catalyst behind the franchise expiration, such as the case in Key West. And so we have to time it, you know, according to a couple factors that we are balancing floors. But we think that, you know, 2 to 3 is the right cadence. Thanks. Operator: Thank you. Our next question comes from the line of Chris Woronka with Deutsche Bank. Please proceed. Chris Woronka: Hey. Good afternoon, everyone. Thanks for taking the questions. there is been a lot of focus across the hotel REITs this earning season about costs. You guys provide kind of some similar similarly directional commentary, I think, to your peers. And, Leslie, I think you mentioned that second half, your you are going to continue to build and maybe be a little bit more slanted toward occ on the RevPAR. So the question is, you know, is the industry maybe falling behind a little bit on rate again? there is been some nice gains, but it seems like expenses are pretty stubborn. And when we get more, we get more labor. Do you think there is some kind of delayed catch up in rates coming as you as you look out? Do you see in your-- you know, maybe 2, 3 quarters out what you are booking now, you see another jump up in room rates. Thanks. Leslie D. Hale: Yeah, look, I would say that rate has been, you know, relatively, you know, healthy and we have seen meaningfully rate growth over the last several quarters. I think from our perspective, we are really focused on growing the bottom line. there is lots of ways to achieve that. Keep in mind, we grew the bottom line by 7% this quarter for the second consecutive quarter. You know, our strategy is sort of broad based. We have been aligning that against focusing on cap capturing consumer demand trends in the lifestyle oriented segment. We have been really thoughtful around our revenue management and balancing between rate and ops. And keep in mind that, you know, occupancy, you know, bring means, you know, higher demand, and higher demand helps your out-of-room spend, which, again that we have seen strong growth in auto room spend for several consecutive quarters. And so we think that our mix is aligned with the strategy that we have been focused on. Chris Woronka: Okay. Helpful. And then I think you are now down to 2 Hyatt Place hotels after the sale of, Fremont. But, you know, I know there is there is been some changes at Hyatt, and I know they are kind of the strategy to have the select brand on top of that or as a solution to so is there gonna be any changes in your in your Hyatt portfolio that you see coming that are maybe related to know, CapEx or positioning? Leslie D. Hale: Yeah, I mean, look, our decision to sell a couple of assets has nothing to do with the Hyatt brand. We believe in the Hyatt brand. It is produced for us for many years. In this particular case, it was just that the market had moved away from the demand of that particular hotel relative to what we are seeing across the rest of Northern California. And so when we looked at the capital and the potential return on those it did not align with our view on a go forward basis, and it was the right thing to do for us. that is nothing to do with the Hyatt brand. You know, we are good partners with Hyatt and believe in the value that their brands bring. Thomas J. Bardenett: An example of that, Christopher, as you know, we have a good footprint in Silicon Valley. And both our Hyatt houses in Santa Clara and San Jose have had great numbers. Obviously, we are right across from the know, Santa Clara where they held the Super Bowl as well as many concerts We love those locations and the contribution that we get from Hyatt in addition to the other asset in Palo Alto. And so we really love certain markets within Silicon Valley. This just happened to be a market that we believe was not gonna recover to the same degree that our other ones did. Chris Woronka: Okay. Very good. Thanks. Thanks, Tom. Thanks, Leslie. Operator: Thank you. There are no further questions at this time. I would like to turn the floor back over to Hales for closing remarks. Leslie D. Hale: Thank you, everybody, for joining us. We hope that everybody has a great summer. We look forward to seeing you guys in the fall. Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation. Before you buy stock in RLJ Lodging Trust, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and RLJ Lodging Trust wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $400,209!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,375,393!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 13, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. RLJ Lodging Trust (RLJ) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in RLJ Lodging Trust? Here are five stocks we like better. Strong second-quarter operating performance: Comparable RevPAR rose 6.8% year over year, outperforming the industry by 110 basis points, while business-transient revenue increased 10% and hotel EBITDA grew 7.1% to $119.5 million. Urban and ancillary demand supported growth: Business travel, leisure and group bookings strengthened across key markets, while out-of-room spending climbed 7.1%. Renovations and conversions also delivered significant gains, including 50% EBITDA growth at four high-impact renovated hotels. RLJ raised its 2026 outlook: The company now expects comparable RevPAR growth of 3.5% to 4.5% and adjusted FFO of $1.37 to $1.50 per diluted share. Its balance sheet remains stable, with $1 billion in liquidity and no debt maturities until 2029. 3 REITs With Big Dividend Growth and Sustainable Payouts RLJ Lodging Trust (NYSE:RLJ) reported second-quarter results that exceeded its expectations, supported by broad-based growth across its urban-focused hotel portfolio, accelerating business travel and higher out-of-room spending. President and Chief Executive Officer Leslie Hale said the company’s comparable revenue per available room, or RevPAR, increased 6.8% from a year earlier, driven by a 4.9% increase in average daily rate to $217 and a 130-basis-point occupancy gain to 77%. The company said its RevPAR growth outperformed the industry by 110 basis points during the quarter. → Sandisk Just Delivered a Blowout Quarter—Here's Why the Stock Is Falling 7 best hotel REITs to buy now “Our operating performance reflects broad-based growth across our entire portfolio, as well as the successful ramp of our renovations and conversions,” Hale said. She added that all of the company’s markets exceeded its expectations. RLJ said business-transient revenue rose 10% in the second quarter, following 9% growth in the first quarter. Business-transient room demand increased 6%, while rates rose 4%. Hale said demand came from national accounts booked through global distribution systems and was broad-based across industries including technology, finance and defense. → 4 Oil and Gas ETF Plays as Prices Stay Sky-High Several markets recorded double-digit business-transient revenue growth, according to Chief Financial Officer Nikhil Bhalla. Chicago and Washington, D.C., each increased 35%, while New York rose 17%, Houston increased 13%, Northern California gained 12% and South Florida rose 10%. The portfolio also benefited from urban leisure demand. Weekday revenues increased 6.3%, while weekend revenues rose 8.1%. Leisure revenue increased 7%, with a 6% rise in rate and a 1% increase in room nights. Group revenue grew 6%, evenly split between demand and average daily rate growth. → No Hangover: Revisiting Microsoft One Week After Earnings Group booking pace for the third quarter was at 110% of the prior-year level, Hale said, while full-year group pace was about 104%. The company noted that booking windows remain short, but near-term group demand continued to materialize during the quarter. Among individual markets, Austin posted 17% RevPAR growth, aided by in-house group demand. Chicago’s RevPAR rose 15% on a strong citywide calendar, while Tampa increased 11% on event-driven demand. Orlando, Charleston and Washington, D.C., each generated high-single-digit RevPAR gains. Northern California RevPAR increased 9%, with management citing World Cup matches as well as corporate investment and business travel connected to the expansion of the artificial-intelligence industry. RLJ said June was its strongest month of the quarter, with RevPAR increasing 12.4%. Preliminary July RevPAR growth approached 11%. Out-of-room spending increased 7.1%, exceeding RevPAR growth by 30 basis points. Management attributed the gain to its renovations, conversions and return-on-investment initiatives designed to expand food-and-beverage offerings, activate underused spaces and generate other ancillary revenue. Hotel EBITDA increased 7.1% to $119.5 million, while hotel EBITDA margins improved 10 basis points to 31.3%. Excluding a prior-year tax benefit, margin improvement would have been 40 basis points, Bhalla said. Corporate adjusted EBITDA was $110.4 million, and adjusted AFFO per diluted share was $0.52. Expenses per occupied room increased 4.9%, reflecting higher costs associated with a larger transient mix, including credit-card and travel-agent commissions, as well as increased food-and-beverage outlet spending. Energy costs also remained elevated. Fixed costs increased 6.4%, though Bhalla said they would have risen 3.4% excluding a tax refund recognized in the prior year. For the second half, management’s guidance implies total expense growth of about 3% at the midpoint and 4% at the high end, with similar growth expected on a per-occupied-room basis. The company highlighted the performance of four high-impact renovations completed last year, which produced 22% revenue growth and 50% EBITDA growth during the second quarter. Seven previously completed conversions generated 8% revenue growth and 12% EBITDA growth. RLJ completed the conversion of the former Renaissance Pittsburgh into The Atterbury, an Autograph Collection hotel under Marriott. The project included renovations to public spaces and guest rooms, a new restaurant and bar called The Drafting Room, a premium function space called The Fulton Room, and activation of the property’s historic rotunda. The company also plans to convert its Fairfield Inn & Suites Key West into a Compass by Margaritaville property. The conversion is expected to begin later this year, with a relaunch planned for 2027. Management said it expects about 50% EBITDA upside at the Key West asset. RLJ is also progressing on converting its Wyndham Boston property into a Hilton Tapestry Collection hotel. During the quarter, RLJ sold the Hyatt Place Fremont/Silicon Valley at a 29.2-times hotel EBITDA multiple including required capital expenditures. Hale said the hotel’s market dynamics had diverged from the company’s broader Northern California portfolio and that the required capital did not meet its expected return threshold. After repaying senior notes that matured July 1 with proceeds from delayed-draw term loans, RLJ had $2.2 billion of debt and no maturities until 2029. The company reported about $1 billion of liquidity, including $600 million of undrawn revolver capacity. Eighty-three of its 91 hotels were unencumbered, while 72% of debt was fixed or hedged at quarter-end. Its weighted average interest rate was 4.8%. RLJ raised its 2026 outlook to reflect second-quarter outperformance, the sale of the Fremont hotel and continued demand trends. The company 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. Adjusted FFO per diluted share of $1.37 to $1.50. Capital expenditures of $80 million to $90 million. Management expects third-quarter performance to be stronger than the fourth quarter. Hale cited momentum in business travel, healthy leisure demand, group pace and the continuing ramp of conversions, while also cautioning that visibility remains limited because of short booking windows and geopolitical and macroeconomic uncertainty. RLJ Lodging Trust is a self-managed, publicly traded real estate investment trust (REIT) that acquires, owns and operates premium-branded, focused-service and compact full-service hotels. The company's portfolio is concentrated in major U.S. markets, targeting properties that benefit from strong corporate and leisure demand, limited new supply and established brand affiliations. The trust's hotels are affiliated with leading global lodging brands across the spectrum of service levels, including lifestyle and upscale segments. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "RLJ Lodging Trust Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

This article first appeared on GuruFocus. Revenue (RevPAR): $167, up 6.8% year-over-year. Average Daily Rate (ADR): $217, up 4.9%. Occupancy: 77%, up 130 basis points. Hotel EBITDA: $119.5 million, up 7.1% year-over-year. Hotel EBITDA Margin: 31.3%, improved 10 basis points year-over-year (or 40 basis points excluding prior-year tax benefit). Adjusted EBITDA: $110.4 million. Adjusted FFO per Diluted Share: $0.52. Out-of-Room Spend: Increased 7.1%, 30 basis points ahead of RevPAR growth. Business Transient Revenue: Increased 10%. Leisure Revenue: Increased 7%. Group Revenue: Increased 6%. Weekday Revenue: Increased 6.3%. Weekend Revenue: Increased 8.1%. Expenses per Occupied Room: Increased 4.9%. Fixed Costs: Increased 6.4% (or 3.4% excluding prior-year tax benefit). Full-Year 2026 Guidance - RevPAR Growth: Expected between 3.5% and 4.5%. Full-Year 2026 Guidance - Comparable Hotel EBITDA: Expected between $369 million and $389 million. Full-Year 2026 Guidance - Corporate Adjusted EBITDA: Expected between $336 million and $356 million. Full-Year 2026 Guidance - Adjusted FFO per Diluted Share: Expected between $1.37 and $1.50. Warning! GuruFocus has detected 8 Warning Sign with RLJ. Is RLJ fairly valued? Test your thesis with our free DCF calculator. Release Date: August 07, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. RLJ Lodging Trust (NYSE:RLJ) delivered strong Q2 results with RevPAR growth of 6.8%, outperforming the industry by 110 basis points, and all markets exceeded expectations. Business transient revenues accelerated by 10%, driven by a 6% increase in demand and 4% rate growth, reflecting strong pricing power and broad-based corporate travel recovery. The company's high-impact renovations and conversions are driving significant value, with four completed renovations achieving 22% revenue growth and 50% EBITDA growth, and seven conversions delivering 8% revenue and 12% EBITDA growth. RLJ Lodging Trust (NYSE:RLJ) is expanding its lifestyle portfolio with new conversions, including the Atterbury in Pittsburgh and the upcoming Margaritaville in Key West, which are expected to drive higher ADR and ancillary revenue growth. The company raised its full-year 2026 guidance, reflecting strong Q2 performance and positive momentum, with July RevPAR growth approaching 11% and a favorable outlook for 2027 with major events and constrained supply. RLJ Lodging Trust (NYSE:RLJ) maintains a strong balance sheet with $1 billion in liquidity, no debt maturities until 2029, and 72% of debt fixed or hedged, providing financial flexibility for capital allocation. Expense growth was higher than anticipated in Q2 due to occupancy growth exceeding expectations, leading to increased variable costs such as credit card fees, travel agent commissions, and higher F&B expenses. The company faces limited visibility due to short booking windows and geopolitical uncertainty, which could impact future demand and performance. Fourth quarter group pace is down year-over-year due to the shift of Salesforce from October to September, and the election is expected to offset benefits from the lapsing of the government shutdown. Energy costs remained elevated, and fixed costs increased by 6.4% (3.4% excluding a prior-year tax benefit), putting pressure on margins. The company is initiating conversion renovations for Boston and Key West in the second half of 2026, which will cause displacement and potentially impact near-term performance. RLJ Lodging Trust (NYSE:RLJ) sold the Fremont Silicon Valley hotel at a high multiple, but this disposition reduces its portfolio and reflects a market that is not expected to recover to the same degree as others. Q: Can you provide more detail on the strength of business transient (BT) demand, specifically regarding booking channels and notable industries?A: Leslie Hale (CEO) noted that BT revenues increased by 10% for the second consecutive quarter, with room nights up 6%. The growth is broad-based, coming from national accounts and GDS, with strength in tech, finance, and defense industries. This is the company's highest-rated customer segment, benefiting both rate and food and beverage (F&B) spend. A company representative added that the transient mix increased by 1% and GDS bookings also rose, which is encouraging as that channel typically books business travelers. Q: What is the outlook for expense growth in the second half of the year, and what factors are driving the current cost increases?A: Leslie Hale (CEO) explained that second-quarter fixed expenses were up 6.4%, but only 3.5% excluding a prior-year tax benefit. Expense growth was driven by higher-than-anticipated occupancy, a higher transient mix (leading to increased credit card and travel agent fees), shorter length of stay, and higher F&B outlet spend. For the back half of 2026, the guidance implies total expense growth of 3% at the midpoint and 4% at the high end, a deceleration from Q2. Q: How are you thinking about the relative performance of the business segments (BT, leisure, group) for the remainder of the year, and what is the booking pace?A: Leslie Hale (CEO) stated that the raised guidance assumes continued strength in BT, healthy leisure demand, and group pace actualizing at current levels (104% for the full year, 110% for Q3). She noted that Q3 is expected to be stronger than Q4, with July up 11%, August expected to be relatively flat, and September benefiting from the Salesforce conference. Q4 pace is down year-over-year due to the Salesforce shift, but will benefit from lapping the government shutdown, partially offset by the election. The company is also starting conversion renovations in Boston and Key West in the back half. Q: Can you provide more details on the new Margaritaville conversion in Key West, including the expected financial impact and how it will compete with the existing Margaritaville property?A: Leslie Hale (CEO) stated that the company generally achieves returns north of 40% on incremental conversion capital. For Key West specifically, they expect about a 50% upside in EBITDA. Tom Bardinet (COO) added that the property is located on the way to Duval Street, and they believe the enhanced pool and beverage experience will attract locals, given the lack of supply in the market. The average daily rate (ADR) in Key West nearly mirrors New York City's, and the Margaritaville brand's strong recognition in the area makes it a natural fit. Q: Given the high returns on conversions, is there consideration to accelerate the pace beyond the current two projects per year?A: Leslie Hale (CEO) responded that the company is thoughtful about managing displacement caused by renovations and must time projects according to factors like franchise expirations. She believes that two to three conversions per year is the right cadence to balance these considerations. Q: How is the transaction market evolving, and does the recent sale of the Fremont asset indicate more opportunities for dispositions?A: Leslie Hale (CEO) noted that the transaction market is more constructive, with more deals in the pipeline and a competitive debt market. The buyer pool has widened to include owner-operators, family offices, and some private equity. Pricing is being assessed on a case-by-case basis. The Fremont sale was driven by that specific market's dynamics moving away from the broader Northern California recovery, and the pending capital requirements didn't make sense for the company. They sold it to a regional operator at a healthy multiple. Q: What is the status of the conversion opportunity in San Diego, and are there other conversion opportunities in the pipeline?A: Leslie Hale (CEO) confirmed the company has a healthy pipeline of conversions and is on pace to deliver two per year. Regarding San Diego, they are making progress with the port authority, executing an extension, and finalizing the design for a transformative repositioning. They expect to make meaningful progress on this asset through the remainder of the year. Q: How are you thinking about capital allocation, specifically regarding share repurchases versus acquisitions and dispositions?A: Leslie Hale (CEO) stated that the company is focused on optimizing all tools to drive shareholder value. With a strong balance sheet and ample liquidity, they have optionality. The strong results from high-impact renovations (50% EBITDA growth) and conversions (11% EBITDA growth) demonstrate the effectiveness of their investments. They continue to believe the stock is undervalued and remain constructive on the transaction side, expecting to be active with dispositions while remaining disciplined. Q: Regarding the recent sale of the Fremont Silicon Valley hotel, does this reflect any change in the company's view of the Hyatt brand?A: Leslie Hale (CEO) clarified that the decision to sell was not related to the Hyatt brand, which has produced well for the company for many years. The sale was driven by the specific market's demand dynamics moving away from the rest of Northern California, and the capital requirements didn't align with their go-forward view. Tom Bardinet (COO) added that they have a good footprint in Silicon Valley with other Hyatt properties in Santa Clara and San Jose performing well, and they love those locations. Q: With the industry seeing some cost pressures, do you anticipate a delayed catch-up in room rates, and how are you balancing rate versus occupancy growth?A: Leslie Hale (CEO) stated that rate growth has been healthy over the last several quarters, but the company is focused on growing the bottom line, which grew 7% for the second consecutive quarter. Their strategy is broad-based, focusing on capturing consumer demand trends in the lifestyle segment and being thoughtful with revenue management to balance rate and occupancy. Higher occupancy drives higher demand, which benefits out-of-room spend, a key growth area for the company. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Achieved 6.8% RevPAR growth, outperforming the industry by 110 basis points due to an urban-centric positioning that captured accelerating business travel, robust urban leisure demand, and benefits from hosting World Cup matches. Business transient (BT) revenues increased by 10% for the second consecutive quarter, driven by a 6% increase in demand and a 4% increase in rate from high-rated corporate customers. Urban markets benefited from a recurring calendar of sports, concerts, and festivals, with notable outperformance in Austin (17% RevPAR growth) and Chicago (15% RevPAR growth). Out-of-room spend grew by 7.1%, exceeding RevPAR growth, as a result of ROI initiatives focused on profitable food and beverage reconcepting and ancillary revenue growth. Northern California showed a 9% RevPAR recovery, primarily fueled by the expansion of the AI industry and increased corporate investment despite broader macro uncertainty. Management attributes the durable growth to a diversified market strategy that is not reliant on any single event, supported by an extended period of muted supply growth in urban centers. Raised full-year guidance to reflect strong Q2 performance and the assumption that business travel momentum and urban leisure demand will remain healthy through the second half of 2026. Q3 performance is expected to be stronger than Q4, with July preliminary RevPAR growth approaching 11% and a group booking pace for the quarter at 110% of the prior year. Q4 outlook accounts for a year-over-year pace decline in October due to the shift of the Salesforce conference from October to September and potential offsets from the upcoming election. The 2027 setup is viewed favorably due to a constrained supply backdrop and a strong event calendar including the Super Bowl, NFL Draft, and Formula 1 rotation into urban markets. Management expects the relationship between top-line growth and expense growth to remain consistent with the first half, with total expense growth projected at 3% to 4% for the back half. Completed the conversion of the Arrott hotel in Pittsburgh to Marriott's Autograph Collection, targeting a 35% EBITDA upside through reimagined public spaces and new F&B concepts. Announced the conversion of the Fairfield Inn and Suites Key West to Compass by Margaritaville, aiming for a 50% EBITDA upside by capturing higher-rated leisure demand in a high-ADR market. Opportunistically sold the Hyatt Place Fremont Silicon Valley at a 29.2x hotel EBITDA multiple, exiting a market where the demand trajectory no longer aligned with the core portfolio. Maintained a strong balance sheet with $1 billion in liquidity and no debt maturities until 2029 after paying off senior notes that matured on July 1st. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. BT growth is broad-based across national accounts and GDS channels, led by industries such as tech, finance, defense, and healthcare. The recovery is being driven by the highest-rated customers, which provides additional benefits to food and beverage (F&B) revenues beyond room nights. Higher-than-expected occupancy growth relative to rate growth led to increased variable costs, including credit card fees and travel agent commissions. A shorter length of stay resulted in higher checkout frequencies, impacting labor costs in a portfolio comprised of 50% suites. Management noted that transient guests favored F&B outlets over banquets, which carry a higher expense load, alongside elevated energy costs and performance-based bonus accruals. Key West is one of the highest ADR markets in the country, and the Margaritaville brand has strong recognition and origins in that specific location. The conversion aims to drive significant ancillary revenue through themed concepts like the '5 O'Clock Somewhere' poolside bar, attracting both hotel guests and local residents.

Q2 RevPAR increased 6.8% Adjusted FFO per diluted common share and unit of $0.52 increased 8.3% Adjusted EBITDA of $110.4 million increased 6.1% Increasing full-year outlook BETHESDA, Md., August 06, 2026--(BUSINESS WIRE)--RLJ Lodging Trust (the "Company") (NYSE: RLJ) today reported results for the three and six months ended June 30, 2026. Second Quarter Highlights Comparable RevPAR of $167.15, an increase of 6.8% over the prior year Comparable Hotel Revenue of $382.0 million, an increase of 6.8% over the prior year Net income of $31.3 million, an increase of 9.4% over the prior year Comparable Hotel EBITDA of $119.5 million, an increase of 7.1% over the prior year Comparable Hotel EBITDA Margin of 31.3% Adjusted EBITDA of $110.4 million, an increase of 6.1% over the prior year Adjusted FFO per diluted common share and unit of $0.52, an increase of 8.3% over the prior year "We are pleased with our strong second quarter results, which exceeded our expectations, driven by the broad-based strength across our portfolio, including the continued acceleration of business travel and robust urban leisure trends. Our results further benefitted from our continued success in driving out-of-room spend as well as the successful ramp of our recently completed renovations and conversions. We also continued to advance our conversion pipeline with the completion and relaunch of our Autograph Collection asset in Pittsburgh, further increasing our exposure to the lifestyle segment and evolving consumer preferences," commented Leslie D. Hale, President and Chief Executive Officer. "The broad-based nature of the growth across markets and demand segments year-to-date give us confidence in the durability of the demand trends we are seeing. As a result, we are raising our full-year guidance to reflect our second quarter outperformance and the continuation of these positive trends through the second half of the year as well as the ongoing ramp of our conversions and renovations." The prefix "comparable" as defined by the Company, denotes operating results which include results for periods prior to its ownership and excludes sold hotels. Explanations of EBITDA, EBITDAre, Adjusted EBITDA, Hotel EBITDA, Hotel EBITDA Margin, FFO, and Adjusted FFO, as well as reconciliations of those measures to net income or loss, if applicable, are included within this release. Operational UpdateFor the three months ended June 30, 2026, Comparable RevPAR increased by 6.8%, driven by ADR growth of 4.9%, with each month of the quarter exceeding the Company's expectations. Comparable non-room revenues increased 7.1%, exceeding comparable RevPAR growth by 30 basis points and reflecting the continued success of the Company's return-on-investment initiatives. This strong top line performance drove Comparable Hotel EBITDA growth of 7.1% and Adjusted EBITDA growth of 6.1% over the prior year period. DispositionDuring the second quarter of 2026, the Company opportunistically sold one hotel in Fremont, California for $13.2 million, which represents 29.2x Hotel EBITDA on a trailing-twelve month basis, including required capital expenditures. Balance SheetOn June 30, 2026, the Company drew $344.0 million under its $569.0 million delayed draw term loan maturing in 2031 and $150.0 million under its delayed draw term loan maturing in 2033 for total proceeds of $494.0 million. Subsequent to quarter end, on July 1, 2026, the Company used these proceeds, together with cash on hand, to fully repay the $500.0 million Senior Notes due 2026 on their maturity date. Following this repayment, the Company had $1.0 billion of total liquidity, $2.2 billion of debt and no debt maturities until 2029, inclusive of extension options. DividendsThe Company’s Board of Trustees declared a quarterly cash dividend of $0.15 per common share of beneficial interest of the Company in the second quarter. The dividend was paid on July 15, 2026 to shareholders of record as of June 30, 2026. The Company's Board of Trustees declared a second quarter cash dividend of $0.4875 on the Company’s Series A Preferred Shares. The dividend was paid on July 31, 2026 to shareholders of record as of June 30, 2026. 2026 OutlookThe Company is updating its full-year outlook to incorporate the strong second quarter outperformance and it's expectations that positive trends will continue through the second half of the year. Additionally, the Company's full year 2026 outlook includes: Net interest expense in the range of $101.0 million to $103.0 million Cash corporate G&A in the range of $33.5 million to $34.5 million Capital expenditures related to renovations in the range of $80.0 million to $90.0 million Diluted weighted average common shares and units of 151.5 million Potential future acquisitions, dispositions, financings, or share repurchases are not incorporated into the Company's outlook above and could result in a material change to the Company's outlook. Earnings CallThe Company will conduct its quarterly analyst and investor conference call on August 7, 2026 at 12:00 p.m. (Eastern Time). The conference call can be accessed by dialing (877) 407-3982 or (201) 493-6780 for international participants and requesting RLJ Lodging Trust’s second quarter earnings conference call. Additionally, a live webcast of the conference call will be available through the Company’s website at http://www.rljlodgingtrust.com. A replay of the conference call webcast will be archived and available through the Investor Relations section of the Company’s website for two weeks. Supplemental InformationPlease refer to the presentation of supplemental information for additional detail and comparable operating statistics, which will be available through the Investor Relations section of the Company's website. About UsRLJ Lodging Trust ("RLJ") is a self-advised, publicly traded real estate investment trust that owns 91 premium-branded, rooms-oriented, high-margin, focused-service and compact full-service hotels located within the 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. Forward-Looking StatementsThis information contains certain statements, other than purely historical information, including estimates, projections, statements relating to the Company’s business plans, objectives and expected operating results, and the assumptions upon which those statements are based, that are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements generally are identified by the use of the words "believe," "project," "expect," "anticipate," "estimate," "plan," "may," "will," "will continue," "intend," "should," or similar expressions. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, beliefs and expectations, such forward-looking statements are not predictions of future events or guarantees of future performance and our actual results could differ materially from those set forth in the forward-looking statements. Except as required by law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. The Company cautions investors not to place undue reliance on these forward-looking statements and urges investors to carefully review the disclosures the Company makes concerning risks and uncertainties in the sections entitled "Risk Factors," "Forward-Looking Statements," and "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 and the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2026, which will be filed on August 7, 2026, as well as risks, uncertainties and other factors discussed in other documents filed by the Company with the Securities and Exchange Commission. RLJ Lodging TrustNon-GAAP and Accounting Commentary Non-Generally Accepted Accounting Principles ("Non-GAAP") Financial MeasuresThe Company considers the following non-GAAP financial measures useful to investors as key supplemental measures of its performance: (1) FFO, (2) Adjusted FFO, (3) EBITDA, (4) EBITDAre, (5) Adjusted EBITDA, (6) Hotel EBITDA, and (7) Hotel EBITDA Margin. These Non-GAAP financial measures should be considered along with, but not as alternatives to, net income or loss as a measure of its operating performance. FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA, Hotel EBITDA, and Hotel EBITDA Margin, as calculated by the Company, may not be comparable to other companies that do not define such terms exactly as the Company defines such terms. Funds From Operations ("FFO")The Company calculates Funds from Operations ("FFO") in accordance with standards established by the National Association of Real Estate Investment Trusts, or NAREIT, which defines FFO as net income or loss, excluding gains or losses from sales of real estate, impairment, the cumulative effect of changes in accounting principles, plus depreciation and amortization, and adjustments for unconsolidated partnerships and joint ventures. Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values have instead historically risen or fallen with market conditions, most real estate industry investors consider FFO to be helpful in evaluating a real estate company’s operations. The Company believes that the presentation of FFO provides useful information to investors regarding the Company’s operating performance and can facilitate comparisons of operating performance between periods and between real estate investment trusts ("REITs"), even though FFO does not represent an amount that accrues directly to common shareholders. The Company’s calculation of FFO may not be comparable to measures calculated by other companies who do not use the NAREIT definition of FFO or do not calculate FFO per diluted share in accordance with NAREIT guidance. Additionally, FFO may not be helpful when comparing the Company to non-REITs. The Company presents FFO attributable to common shareholders, which includes unitholders of limited partnership interest ("OP units") in RLJ Lodging Trust, L.P., the Company’s operating partnership, because the OP units may be redeemed for common shares of the Company. The Company believes it is meaningful for the investor to understand FFO attributable to all common shares and OP units. EBITDA and EBITDAreEarnings Before Interest, Taxes, Depreciation, and Amortization ("EBITDA") is defined as net income or loss excluding: (1) interest expense; (2) income tax expense; and (3) depreciation and amortization expense. The Company considers EBITDA useful to an investor in evaluating and facilitating comparisons of its operating performance between periods and between REITs by removing the impact of its capital structure (primarily interest expense) and asset base (primarily depreciation and amortization expense) from its operating results. In addition, EBITDA is used as one measure in determining the value of hotel acquisitions and dispositions. In addition to EBITDA, the Company presents EBITDAre in accordance with NAREIT guidelines, which defines EBITDAre as net income or loss excluding interest expense, income tax expense, depreciation and amortization expense, gains or losses from sales of real estate, impairment, and adjustments for unconsolidated joint ventures. The Company believes that the presentation of EBITDAre provides useful information to investors regarding the Company's operating performance and can facilitate comparisons of operating performance between periods and between REITs. Adjustments to FFO and EBITDAThe Company adjusts FFO, EBITDA, and EBITDAre for certain items that the Company considers outside the normal course of operations. The Company believes that Adjusted FFO, Adjusted EBITDA, and Adjusted EBITDAre provide useful supplemental information to investors regarding its ongoing operating performance that, when considered with net income or loss, FFO, EBITDA, and EBITDAre, are beneficial to an investor’s understanding of the Company's operating performance. The Company adjusts FFO, EBITDA, and EBITDAre for the following items: Transaction Costs: The Company excludes transaction costs expensed during the period Pre-Opening Costs: The Company excludes certain costs related to pre-opening of hotels Non-Cash Expenses: The Company excludes the effect of certain non-cash items such as the amortization of share-based compensation, non-cash income tax expense or benefit, and non-cash interest expense related to discontinued interest rate hedges Other Non-Operational Expenses: The Company excludes the effect of certain non-operational expenses representing income and expenses outside the normal course of operations Hotel EBITDA and Hotel EBITDA MarginWith respect to Comparable Hotel EBITDA, the Company believes that excluding the effect of corporate-level expenses and certain non-cash items provides a more complete understanding of the operating results over which individual hotels and operators have direct control. The Company believes property-level results provide investors with supplemental information about the ongoing operational performance of the Company’s hotels and the effectiveness of third-party management companies. Comparable Hotel EBITDA and Comparable Hotel EBITDA Margin include prior ownership information provided by the sellers of the hotels for periods prior to our acquisition of the hotels and excludes results from sold hotels as applicable. Comparable adjustments: Sold hotelsFor the three and six months ended June 30, 2026 and 2025, Comparable adjustments included the following sold hotels: Courtyard Atlanta Buckhead sold in March 2025 Embassy Suites by Hilton Dallas-Love Field sold in December 2025 Residence Inn Houston by the Galleria sold in December 2025 Hyatt Place Fremont/Silicon Valley sold in June 2026 View source version on businesswire.com: https://www.businesswire.com/news/home/20260806693845/en/ Contacts Leslie D. Hale, President and Chief Executive Officer – (301) 280-7777 Nikhil Bhalla, Chief Financial Officer – (301) 280-7777 For additional information or to receive press releases via email, please visit our website: https://www.rljlodgingtrust.com

BETHESDA, Md., June 15, 2026--(BUSINESS WIRE)--RLJ Lodging Trust (the "Company") (NYSE: RLJ) today announced that its Board of Trustees has declared a quarterly cash dividend of $0.15 per common share of beneficial interest. The dividend is payable on July 15, 2026, to shareholders of record as of June 30, 2026. The Board of Trustees also declared a quarterly cash dividend of $0.4875 on the Company’s Series A Preferred Shares. The dividend is payable on July 31, 2026, to shareholders of record as of June 30, 2026. About Us RLJ Lodging Trust is a self-advised, publicly traded real estate investment trust that owns primarily premium-branded, high-margin, focused-service and compact full-service hotels. Forward Looking Statements This information contains certain statements, other than purely historical information, including estimates, projections, statements relating to the Company’s business plans, objectives and expected operating results, and the assumptions upon which those statements are based, that are "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements generally are identified by the use of the words "believe," "project," "expect," "anticipate," "estimate," "plan," "may," "will," "will continue," "intend," "should," or similar expressions. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, beliefs and expectations, such forward-looking statements are not predictions of future events or guarantees of future performance and our actual results could differ materially from those set forth in the forward-looking statements. Except as required by law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. The Company cautions investors not to place undue reliance on these forward looking statements and urges investors to carefully review the disclosures the Company makes concerning risks and uncertainties in the sections entitled "Risk Factors," "Forward- Looking Statements," and "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in the Company’s Annual Report, as well as risks, uncertainties and other factors discussed in other documents filed by the Company with the Securities and Exchange Commission. View source version on businesswire.com: https://www.businesswire.com/news/home/20260615005313/en/ Contacts Company Contacts: Leslie D. Hale, President and Chief Executive Officer – (301) 280-7777 Nikhil Bhalla, Chief Financial Officer – (301) 280-7777 For additional information or to receive press releases via email, please visit our website: http://www.rljlodgingtrust.com

First quarter RevPAR growth of 4.8% outperformed the industry by 100 basis points, driven by the urban-centric portfolio's ability to capture broad-based momentum across all demand segments. Business transient revenue grew 9%, fueled by record corporate profits and increased business investment in sectors like AI, technology, finance, and life sciences. Northern California achieved 27% RevPAR growth, benefiting from the Super Bowl, favorable conference timing, and the continued expansion of the AI industry in the region. Non-room revenue growth of 8.2% significantly exceeded RevPAR performance, validating ROI initiatives focused on expanding ancillary revenue channels and food and beverage offerings. Strategic capital allocation through transformative renovations and conversions contributed meaningfully to results, with 7 completed conversions generating 16% EBITDA growth. Management attributes margin expansion of 45 basis points to a lean operating model and disciplined cost management, which offset elevated energy expenses from winter storms. Revised 2026 guidance incorporates Q1 outperformance while maintaining a cautious stance for the remainder of the year due to macroeconomic and geopolitical uncertainty. The outlook assumes sustained strength in business transient demand and robust urban leisure experiences, with urban markets expected to be the primary beneficiaries. Second quarter group pace shows a 400 basis point improvement, with an increasing share of corporate bookings expected to drive higher ADR and out-of-room spend. Management anticipates significant catalysts starting in June and continuing through the back half of the year, including the World Cup and America's 250th anniversary, with the World Cup particularly benefiting high-occupancy markets like L.A., New York, and Miami. The conversion pipeline remains active, with the Renaissance Pittsburgh relaunching under the Autograph Collection this summer and the Wyndham Boston conversion starting later this year. The company addressed all debt maturities through 2029 by expanding undrawn capacity and plans to pay off $500 million in senior notes maturing in July. Property insurance costs saw a double-digit decline following a favorable renewal last year, providing a tailwind to fixed cost management. Management noted that while booking windows for group travel remain short, the leisure booking window has actually elongated as consumers secure rooms for high-demand events. The Austin market is expected to remain positive despite the convention center closure, as the portfolio focuses on self-contained group business and benefits from airport expansions. Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management clarified that the shorter booking window is specific to group travel, while leisure booking windows have actually elongated. BT acceleration is broad-based, particularly in national accounts and high-growth sectors like aerospace and life sciences. RLJ is focusing on securing blocks for teams, media, and sponsors with deposits already being received in 3 of 9 key markets. The company expects the primary benefit to be driven by ADR growth rather than just occupancy, given the high-occupancy nature of the host markets. Management intends to be active with dispositions to fund share buybacks on a leverage-neutral basis, while maintaining a balanced approach that includes ongoing investment in high-ROI conversion projects. Buybacks are targeted to be executed on a leverage-neutral basis using proceeds from asset recycling. Northern California achieved 27% RevPAR growth in Q1, driven by one-time events such as the Super Bowl and favorable conference timing, as well as recurring factors like improving local policy, increased return-to-office trends, and venture capital investment in AI. International travel from Mexico, the U.K., and India is growing, with China expected to be the final recovery catalyst. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here.