Segment Information

9 Months Ended

Sep. 30, 2025

Segment Reporting [Abstract]

Segment Information

12. Segment Information

The Company considers each of its hotels to be an operating segment and allocates resources and assesses the operating performance for each hotel individually. The Company has aggregated its hotels into a single reportable segment, Hotel Ownership, based on the following aggregation criteria:

● All of the Company’s hotels offer similar products and services to their customers in the form of hotel rooms, food and beverage, and ancillary services;

● The Company utilizes third-party hotel management companies to deliver its products and services to its customers across all of its hotels;

● The Company’s hotels are designed and operated to appeal to similar individuals, groups, leisure, and business customers that travel to its hotels; and

● The Company’s third-party hotel managers utilize the same methods (direct hotel sales and various online booking portals) to distribute the Company’s products and services across all of its hotels.

The Company’s Chief Operating Decision Maker (“CODM”) is its Chief Executive Officer. The CODM reviews and makes decisions on all facets of the Company’s business using all available financial and non-financial data for each hotel individually. Capital allocation decisions to acquire, sell, enhance, redevelop, or perform renewal and replacement expenditures are determined on a hotel-by-hotel basis. Specifically, the CODM reviews the results of each hotel to assess the hotel’s profitability. The CODM does not use aggregated data by brand, property type, or geography to formulate the Company’s operating and investment strategy, to manage its business, or to make decisions about resource allocation. The key measure the CODM uses to allocate resources and assess performance is individual hotel net income (loss) before interest expense, income taxes, depreciation, and amortization for REITs, adjusted to exclude the following items that are not reflective of its ongoing operating performance or incurred in the normal course of business (“Hotel Adjusted EBITDAre”):

● Business interruption insurance proceeds;

● Property-level hurricane-related restoration expenses and legal fees;

● Pre-opening costs associated with extensive renovation projects;

● Property-level legal settlements, restructuring, severance, and management transition costs;

● Taxes assessed on commercial rents; and

● Other nonrecurring identified adjustments.

The following tables include revenues, significant hotel operating expenses, and Hotel Adjusted EBITDAre for the Company’s hotels, reconciled to the consolidated amounts included in the Company’s consolidated statements of operations, which the CODM uses to manage its business, such as how to allocate capital to its hotels and how to determine the Company’s acquisition and disposition strategies (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Revenues
Total revenues	$	229,323	$	226,392	$	723,160	$	691,039
Operating Expenses
Room		39,303		37,342		117,333		110,145
Food and beverage		48,717		46,155		148,731		138,170
Other operating		6,337		5,797		18,430		18,126
Advertising and promotion		13,420		12,940		39,593		37,873
Repairs and maintenance		9,954		9,094		29,203		26,764
Utilities		7,832		7,670		21,624		19,909
Franchise costs		4,471		4,711		13,773		13,735
Property tax, ground lease and insurance		19,665		19,868		57,855		59,190
Other property-level expenses (1)		26,926		26,389		87,240		83,212
		176,625		169,966		533,782		507,124
Hotel Adjusted EBITDAre	$	52,698	$	56,426	$	189,378	$	183,915

	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Reconciliation of Hotel Adjusted EBITDAre to Net Income
Hotel Adjusted EBITDAre	$	52,698	$	56,426	$	189,378	$	183,915
Non-hotel operating expenses, net (2)		(8)		18		100		9
Pre-opening expenses (3)		—		(853)		(6,471)		(1,452)
Property-level COVID-19 relief grant (3)		—		—		—		1,343
Taxes assessed on commercial rents (3)		(189)		(215)		(541)		(376)
Amortization of right-of-use assets and obligations		288		288		871		871
Corporate overhead		(6,970)		(7,577)		(24,221)		(23,263)
Depreciation and amortization		(33,928)		(31,689)		(100,328)		(91,841)
Interest and other income		3,160		2,350		7,024		11,306
Interest expense		(13,412)		(15,982)		(39,258)		(39,685)
(Loss) gain on sale of assets, net		—		—		(8,751)		457
(Loss) gain on extinguishment of debt		(180)		—		(180)		59
Income tax (provision) benefit, net		(137)		483		(272)		1,083
Net income	$	1,322	$	3,249	$	17,351	$	42,426

(1) Other property-level expenses include property-level general and administrative expenses, such as payroll, benefits, and other employee-related expenses, contract and professional fees, credit and collection expenses, employee recruitment, relocation and training expenses, labor dispute expenses, consulting fees, management fees, and other expenses.

(2) Non-hotel operating expenses, net are included in property tax, ground lease and insurance on the Company’s consolidated statements of operations for the three and nine months ended September 30, 2025 and 2024, and include corporate-level current year property taxes and insurance, as well as any prior year property taxes assessed on sold hotels, net of any refunds received.

(3) When assessing a hotel’s operating performance, the CODM excludes certain items that are not indicative of the ongoing operating performance of the Company’s hotels, including pre-opening expenses associated with extensive renovation projects such as the work performed at Andaz Miami Beach, property-level grants, and taxes assessed on commercial rents.

The CODM does not receive asset information by segment. Assets reported to the CODM are consistent with those included on the Company’s consolidated balance sheets, with particular emphasis on the Company’s cash and cash equivalents, restricted cash, and debt.