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SEC filingQ1 2026 revenue declined 3.5% to $267.7M due to hotel dispositions and weaker comparable properties, while operating income fell 78.5% to $13.2M from higher advisory fees tied to tax indemnification, driving net loss to -$63.8M.
The net loss expanded to -$63.8 million (-219.3% YoY) with diluted EPS at -$11.03 (-124.6% YoY), underscoring vulnerability to non-core expenses and fixed obligations. Rooms revenue remains tied to demand via occupancy—measuring hotel capacity utilization—pricing through ADR, and supply of rooms, with dispositions directly curbing the latter.
A positive was net cash provided by operating activities, swinging to +$29.5 million from -$25.0 million prior year. This improvement aids navigation of operating shortfalls, where the Company works with property managers and lenders to tap reserves. Management excludes non-cash or non-core items from Adjusted FFO for cleaner operating comparisons, while hotel agreements allow premiums for self-insured health plans as operating expenses.
Looking forward, the Company will evaluate dividends quarterly and anticipates upper upscale hotel investments. These dynamics highlight disciplined portfolio management amid advisor-related costs and disposition strategy, positioning for lodging opportunities as market cycles shift.