What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-11 compared with 2025-05-08 · 323 added, 118 removed, 417 unchanged (51% of the section changed)

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• changes in governmental regulations, accounting rules, tax rates and similar matters;

• legislative and regulatory changes, including changes to the Internal Revenue Code of 1986, as amended (the “Code”) and related rules, regulations and interpretations governing the taxation of REITs;

• limitations imposed on our business and our ability to satisfy complex rules in order for us to qualify as a REIT for U.S.

14 unchanged sentences

We operate in the direct hotel investment segment of the hotel lodging industry.

As of March 31, 2025, we owned interests in 15 hotel properties in seven states, the District of Columbia, Puerto Rico and St.

As of June 30, 2025, we owned interests in 15 hotel properties in seven states, the District of Columbia, Puerto Rico and St.

Virgin Islands with 3,807 total rooms, or 3,667 net rooms, excluding those attributable to our joint venture partner.

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We own 14 of our hotel properties directly and one hotel property through an investment in a majority-owned consolidated entity.

We are advised by Ashford LLC through an advisory agreement.

We are advised by Ashford Hospitality Advisors LLC through an advisory agreement.

Ashford LLC is a subsidiary of Ashford Inc.

All of the hotel properties in our portfolio are currently asset-managed by Ashford LLC.

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instead, we contractually engage hotel management companies to operate them for us under management contracts.

As of March 31, 2025, Remington Hospitality , a subsidiary of Ashford Inc., managed four of our 15 hotel properties.

As of June 30, 2025, Remington Hospitality, a subsidiary of Ashford Inc., managed five of our 15 hotel properties.

Third-party management companies managed the remaining hotel properties.

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has an ownership interest.

These products and services include, but are not limited to, design and construction services, debt placement and related services, broker-dealer and distribution services, audio visual services, real estate advisory and brokerage services, insurance policies covering general liability, workers compensation and claims services, hypoallergenic premium rooms, watersport activities, travel/transportation services and cash management services.

These products and services include, but are not limited to, design and construction services, debt placement and related services, broker-dealer and distribution services, audio visual services, real estate advisory and brokerage services, insurance policies covering general liability, workers compensation and business automobile claims, insurance claims services, hypoallergenic premium rooms, watersport activities, travel/transportation services and cash management services.

Bennett, chairman of our board of directors and chairman and chief executive officer of Ashford Inc.

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Archie Bennett, Jr.

(together, the “Bennetts”), as of March 31, 2025, hold a controlling interest in Ashford Inc.

(together, the “Bennetts”), as of June 30, 2025, hold a controlling interest in Ashford Inc.

The Bennetts owned approximately 809,937 shares of Ashford Inc.

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Series D Convertible Preferred Stock, which, along with all unpaid accrued and accumulated dividends thereon, was convertible (at a conversion price of $117.50 per share) into an additional approximate 4,482,564 shares of Ashford Inc.

common stock, which if converted as of March 31, 2025, would have increased the Bennetts’ ownership interest in Ashford Inc.

common stock, which if converted as of June 30, 2025, would have increased the Bennetts’ ownership interest in Ashford Inc.

The 18,758,600 shares of Series D Convertible Preferred Stock owned by Mr.

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Additionally, Mr.

Bennett acquired voting rights over approximately 590,000 common shares, effective March 25, 2025.

As of March 31, 2025, Mr.

Bennett acquired the right to direct votes, effective March 25, 2025, and as of June 30, 2025 those rights represented approximately 565,000 common shares.

As of June 30, 2025, Mr.

Bennett and Mr.

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Recent Developments

On January 14, 2025, the Company amended its mortgage loan secured by the 170-room Ritz-Carlton Lake Tahoe.

The terms of the amendment included a $10.0 million principal pay down, extending the current maturity date to July 2025, an interest rate reduction to SOFR + 3.25%, and one six-month extension option subject to satisfaction of certain conditions.

The mortgage loan had an initial maturity date in January 2025.

On March 7, 2025, the Company refinanced its $293.2 million mortgage loan secured by The Clancy, The Notary Hotel, Marriott Seattle Waterfront, and Sofitel Chicago Magnificent Mile, which had an interest rate of SOFR + 2.66% and a final maturity date in June of 2025 and its $62.0 million mortgage loan secured by The Ritz-Carlton Reserve Dorado Beach, which had an interest rate of SOFR + 4.75% and a final maturity date in March of 2026.

The new $363.0 million mortgage loan bears interest at a floating interest rate of SOFR + 2.52% and has a two-year initial term with three one-year extension options, subject to the satisfaction of certain conditions.

The mortgage loan is secured by five hotels:

The Clancy, The Notary Hotel, Marriott Seattle Waterfront, Sofitel Chicago Magnificent Mile, and The Ritz-Carlton Reserve Dorado Beach.

The $363.0 million mortgage loan amount represents an approximate 49% loan-to-value based on third-party appraisals completed by the lender.

The appraisals valued the hotels at approximately $742 million based on the sum of their “as-is” values.

On April 1, 2025, Ms.

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Sirna is an independent director under NYSE listing standards and the Company’s corporate governance guidelines.

Sirna has not been appointed to serve on any committee of the board of directors.

On May 5, 2025, the Company completed the transition of the 415-room Sofitel Chicago Magnificent Mile from a brand-managed hotel to a franchise structure.

Under the franchise structure, the hotel will continue to be the Sofitel Chicago Magnificent Mile, but will be managed by Remington Hospitality under the existing terms of its Master Hotel Management Agreement.

The management agreement with Remington Hospitality is terminable upon sale of the hotel.

The management agreement with Remington Hospitality is terminable upon the sale of the hotel.

The Company plans to renovate the lobby, restaurant, and meeting space over the next two years.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S.

The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions.

The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027.

We are currently assessing the full effects of the legislation on our effective tax rate and cash tax position, but the changes resulting from the tax provisions in the OBBBA are not expected to have a material impact on our consolidated financial statements.

On July 25, 2025, we amended the mortgage loan secured by The Ritz-Carlton Lake Tahoe.

Terms of the amendment included extending the maturity date from July 2025 to July 2026.

On August 7, 2025, we sold the Marriott Seattle Waterfront hotel pursuant to an Agreement of Purchase and Sale, entered into effective July 3, 2025, for $145 million in cash, subject to customary pro-rations and adjustments.

Additionally, the Company repaid approximately $88.4 million on the mortgage loan that was partially secured by the hotel property.

Key Indicators of Operating Performance

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RevPAR changes that are primarily driven by changes in occupancy have different implications for overall revenues and profitability than changes that are driven primarily by changes in ADR.

For example, an increase in occupancy at a hotel would lead to additional variable operating costs (including housekeeping services, utilities and room supplies) and could also result in increased other operating department revenue and expenses.

For example, an increase in occupancy at a hotel would lead to additional variable operating costs (including housekeeping services, utilities and room supplies) and could also result in

increased other operating department revenue and expenses.

Changes in ADR typically have a greater impact on operating margins and profitability as they do not have a substantial effect on variable operating costs.

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RESULTS OF OPERATIONS

Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024

The following table summarizes changes in key line items from our condensed consolidated statements of operations for the three months ended March 31, 2025 and 2024 (in thousands except percentages):

Three Months Ended March 31, Favorable (Unfavorable)

Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024

The following table summarizes changes in key line items from our condensed consolidated statements of operations for three months ended June 30, 2025 and 2024 (in thousands except percentages):

Three Months Ended June 30, Favorable (Unfavorable)

2025 2024 $ Change % Change

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Other 23,682 23,797 (115) (0.5)

Total revenue 179,077 187,587 (8,510) (4.5)

Hotel operating expenses:

Rooms 27,285 27,476 191 0.7

Food and beverage 35,767 36,664 897 2.4

Other expenses 56,445 58,155 1,710 2.9

Management fees 5,541 6,068 527 8.7

Total hotel operating expenses 125,038 128,363 3,325 2.6

Property taxes, insurance and other 7,892 10,058 2,166 21.5

Depreciation and amortization 23,360 24,694 1,334 5.4

Advisory services fee 7,191 7,828 637 8.1

Corporate general and administrative (2,298) 4,469 6,767 151.4

Total expenses 161,183 175,412 14,229 8.1

Operating income (loss) 17,894 12,175 5,719 47.0

Equity in earnings (loss) of unconsolidated entity — (85) 85 100.0

Interest income 1,519 1,072 447 41.7

Other income (expense) (1,250) — (1,250) (100.0)

Interest expense and amortization of discounts and loan costs (25,361) (27,285) 1,924 7.1

Write-off of loan costs and exit fees (3) (82) 79 96.3

Gain (loss) on extinguishment of debt

— (22) 22 100.0

Realized and unrealized gain (loss) on derivatives 15 326 (311) (95.4)

Income (loss) before income taxes (7,186) (13,901) 6,715 48.3

Income tax (expense) benefit 345 114 231 (202.6)

Net income (loss) (6,841) (13,787) 6,946 50.4

(Income) loss attributable to noncontrolling interest in consolidated entities (115) 303 418 138.0

Net (income) loss attributable to redeemable noncontrolling interests in operating partnership 1,489 1,919 (430) (22.4)

Net income (loss) attributable to the Company $ (5,467) $ (11,565) $ 6,098 52.7 %

All hotel properties owned for the three months ended June 30, 2025 and 2024 have been included in our results of operations during the respective periods in which they were owned.

Based on when a hotel property was acquired or disposed of, operating results for certain hotel properties are not comparable for the three months ended June 30, 2025 and 2024.

The hotel property listed below is not a comparable hotel property for the periods indicated and all other hotel properties are considered comparable hotel properties.

The following disposition affects reporting comparability related to our condensed consolidated financial statements:

Hotel Property Location Type Date

Hilton La Jolla Torrey Pines

La Jolla, California

July 17, 2024

The following table illustrates the key performance indicators of all hotel properties that were included in our results of operations during the three months ended June 30, 2025 and 2024:

Three Months Ended June 30,

Occupancy 71.85 % 72.82 %

ADR (average daily rate) $ 438.58 $ 415.24

RevPAR (revenue per available room) $ 315.11 $ 302.37

Rooms revenue (in thousands) $ 109,824 $ 116,227

Total hotel revenue (in thousands) $ 179,077 $ 187,587

The following table illustrates the key performance indicators of the 15 hotel properties that were owned for the full three months ended June 30, 2025 and 2024:

Three Months Ended June 30,

Occupancy 71.85 % 71.46 %

ADR (average daily rate) $ 438.58 $ 435.24

RevPAR (revenue per available room) $ 315.11 $ 311.01

Rooms revenue (in thousands) $ 109,824 $ 108,395

Total hotel revenue (in thousands) $ 179,077 $ 173,475

Net Income (Loss) Attributable to the Company.

Net loss attributable to the Company decreased $6.1 million, from $11.6 million for the three months ended June 30, 2024 (the “2024 quarter”) to $5.5 million for the three months ended June 30, 2025 (the “2025 quarter”), as a result of the factors discussed below.

Rooms Revenue .

Rooms revenue decreased $6.4 million, or 5.5%, to $109.8 million during the 2025 quarter compared to the 2024 quarter primarily due to the sale of the Hilton La Jolla Torrey Pines in July 2024.

During the 2025 quarter, our 15 comparable hotel properties experienced a 39 basis point increase in occupancy and a 0.8% increase in room rates.

Fluctuations in rooms revenue between the 2025 quarter and the 2024 quarter are a result of the changes in occupancy and ADR between the 2025 quarter and the 2024 quarter as reflected in the table below (dollars in thousands):

Hotel Property Favorable (Unfavorable)

Rooms Revenue Occupancy

(change in bps) ADR (change in %)

Capital Hilton

$ (692) (457) — %

Marriott Seattle Waterfront

93 227 (1.7) %

The Notary Hotel (77) (15) (0.7) %

The Clancy 1,243 381 10.3 %

Sofitel Chicago Magnificent Mile 164 (3) 2.0 %

Pier House Resort & Spa 50 286 (3.1) %

The Ritz-Carlton St.

(1,696) (749) (4.2) %

Park Hyatt Beaver Creek Resort & Spa (1)

(442) (1,090) 7.8 %

Hotel Yountville (1)

(357) (291) (6.7) %

The Ritz-Carlton Sarasota

199 363 (3.1) %

Bardessono Hotel and Spa (196) (52) (3.7) %

The Ritz-Carlton Lake Tahoe (2)

446 694 (3.3) %

Cameo Beverly Hills

(95) 533 (10.3) %

The Ritz-Carlton Reserve Dorado Beach 1,764 771 3.0 %

Four Seasons Resort Scottsdale 1,025 571 1.5 %

Total $ 1,429 39 0.8 %

Non Comparable

Hilton La Jolla Torrey Pines (7,832) n/a n/a

(1) This hotel was under renovation during the 2025 quarter.

(2) This hotel was under renovation during the 2024 quarter.

Food and Beverage Revenue .

Food and beverage revenue decreased $2.0 million, or 4.2%, to $45.6 million during the 2025 quarter compared to the 2024 quarter.

This decrease is attributable to a decrease of $4.8 million at the Hilton La Jolla Torrey Pines as a result of its sale on July 17, 2024 and a decrease of $2.6 million at Capital Hilton, The Ritz-Carlton St.

Thomas, Park Hyatt Beaver Creek Resort & Spa, Cameo Beverly Hills and The Notary Hotel.

These decreases were partially offset by an aggregate increase of $5.4 million at 10 comparable hotel properties.

Other Hotel Revenue .

Other hotel revenue, which consists mainly of condo management fees, health center fees, resort fees, golf, telecommunications, parking and rentals, decreased $115,000, or 0.5%, to $23.7 million during the 2025 quarter compared to the 2024 quarter.

This decrease is attributable to an aggregate decrease in other hotel revenue of $663,000 at Park Hyatt Beaver Creek Resort & Spa, Four Seasons Resort Scottsdale, Cameo Beverly Hills, The Ritz-Carlton St.

Thomas, Sofitel Chicago Magnificent Mile and Hotel Yountville and a decrease of $1.5 million due to the sale of Hilton La Jolla Torrey Pines, partially offset by an aggregate increase of $2.0 million at nine comparable hotel properties.

Rooms Expense .

Rooms expense decreased $191,000, or 0.7%, to $27.3 million in the 2025 quarter compared to the 2024 quarter.

This decrease is primarily attributable to an aggregate decrease of $306,000 at six comparable hotel properties and a decrease of $1.5 million due to the sale of Hilton La Jolla Torrey Pines, partially offset by an aggregate increase of $1.6 million at The Ritz-Carlton Reserve Dorado Beach, Four Seasons Resort Scottsdale, The Clancy, The Ritz-Carlton Lake Tahoe, Marriott Seattle Waterfront, The Ritz-Carlton Sarasota, Capital Hilton and The Notary Hotel.

Food and Beverage Expense .

Food and beverage expense decreased $897,000, or 2.4%, to $35.8 million during the 2025 quarter compared to the 2024 quarter.

This decrease is attributable to an aggregate decrease of $678,000 at six comparable hotel properties and a decrease of $2.4 million due to the sale of Hilton La Jolla Torrey Pines, partially offset by an aggregate increase of $2.2 million at The Ritz-Carlton Lake Tahoe, Four Seasons Resort Scottsdale, The Ritz-Carlton Reserve Dorado Beach, The Ritz-Carlton Sarasota, Marriott Seattle Waterfront, Pier House Resort & Spa, The Notary Hotel, The Clancy and Capital Hilton.

Other Operating Expenses .

Other operating expenses decreased $1.7 million, or 2.9%, to $56.4 million in the 2025 quarter compared to the 2024 quarter.

Hotel operating expenses consist of direct expenses from departments associated with revenue streams and indirect expenses associated with support departments and incentive management fees.

We experienced an increase of $240,000 in direct expenses and a decrease of $2.0 million in indirect expenses and incentive management fees in the 2025 quarter as compared to the 2024 quarter.

Direct expenses were 4.6% of total hotel revenue in the 2025 quarter and 4.2% in the 2024 quarter.

The increase in direct expenses is associated with higher direct expenses of approximately $587,000 at nine comparable hotel properties, partially offset by lower direct expenses of $212,000 due to the sale of Hilton La Jolla Torrey Pines and an aggregate decrease of approximately $135,000 at Park Hyatt Beaver Creek Resort & Spa, The Clancy, Bardessono Hotel and Spa, Sofitel Chicago Magnificent Mile, Capital Hilton and Hotel Yountville.

The decrease in indirect expenses comprises decreases in:

(i) incentive management fees of $1.1 million comprising an aggregate decrease of $1.0 million at our 15 comparable hotel properties and a decrease of $132,000 at the one disposed hotel property;

(ii) lease expense of $926,000 comprising a decrease of $1.0 million at the one disposed hotel property partially offset by an aggregate increase of $87,000 at our 15 comparable hotel properties;

(iii) general and administrative costs of $101,000 comprising a decrease of $936,000 at the one disposed hotel property partially offset by an aggregate increase of $835,000 at our 15 comparable hotel properties;

and (iv) marketing costs of $67,000 comprising a decrease of $975,000 at the one disposed hotel property partially offset by an aggregate increase of $908,000 at our 15 comparable hotel properties.

These decreases were partially offset by increases in:

(i) repairs and maintenance of $170,000 comprising an aggregate increase of $505,000 at our 15 comparable hotel properties partially offset by a decrease of $335,000 at the one disposed hotel property;

and (ii) energy costs of $112,000 comprising an aggregate increase of $552,000 at our 15 comparable hotel properties, partially offset by a decrease of $440,000 at the one disposed hotel property.

Management Fees .

Base management fees decreased $527,000, or 8.7%, to $5.5 million in the 2025 quarter compared to the 2024 quarter.

Base management fees decreased by $382,000 at seven comparable hotel properties and by $424,000 at the one disposed hotel property.

These decreases were partially offset by an aggregate increase of $279,000 at Sofitel Chicago Magnificent Mile, The Notary Hotel, The Clancy, Marriott Seattle Waterfront, Pier House Resort & Spa, The Ritz-Carlton Lake Tahoe, The Ritz-Carlton Reserve Dorado Beach and Four Seasons Resort Scottsdale.

Property Taxes, Insurance and Other .

Property taxes, insurance and other decreased $2.2 million, or 21.5%, to $7.9 million in the 2025 quarter compared to the 2024 quarter.

The decrease is primarily attributable to an aggregate decrease of approximately $1.7 million at ten comparable hotel properties and a decrease of $766,000 at the one disposed hotel property.

These decreases were partially offset by an aggregate increase of approximately $261,000 at the Capital Hilton, Bardessono Hotel and Spa, Cameo Beverly Hills, Four Seasons Resort Scottsdale and The Notary Hotel.

Depreciation and Amortization .

Depreciation and amortization decreased $1.3 million, or 5.4%, to $23.4 million in the 2025 quarter compared to the 2024 quarter.

There was an aggregate decrease of $2.2 million at seven comparable hotel properties and a decrease of $1.1 million at the one disposed hotel property, partially offset by an aggregate increase of $1.9 million at The Ritz-Carlton Lake Tahoe, Park Hyatt Beaver Creek Resort & Spa, Ritz Dorado Beach, Cameo Beverly Hills, Four Seasons Resort Scottsdale, Hotel Yountville, The Ritz-Carlton Sarasota and Bardessono Hotel and Spa.

Advisory Services Fee.

Advisory services fee decreased $637,000, or 8.1%, to $7.2 million in the 2025 quarter compared to the 2024 quarter due to decreases of $934,000 in equity-based compensation and $460,000 in the incentive fee, partially offset by increases of $616,000 in reimbursable expenses and $141,000 in the base advisory fee.

In the 2025 quarter, we recorded an advisory services fee of $7.2 million, which included reimbursable expenses of $3.6 million, a base advisory fee of $3.5 million, incentive fee of $188,000 and a credit to expense of $51,000 associated with equity grants of our common stock and LTIP units awarded to the officers and employees of Ashford Inc.

In the 2024 quarter, we recorded an advisory services fee of $7.8 million, which included a base advisory fee of $3.3 million, reimbursable expenses of $3.0 million, equity-based compensation of $883,000 and an incentive fee of $648,000.

Corporate General and Administrative .

Corporate general and administrative was a credit to expense of $2.3 million in the 2025 quarter as compared to expense of $4.5 million in the 2024 quarter.

The decrease in corporate general and administrative expense is primarily due to a $5.0 million insurance recovery for prior legal expenses, a decrease in professional fees of $1.9 million and miscellaneous expenses of $251,000, partially offset by an increase in public company costs of $375,000.

Equity in Earnings (Loss) of Unconsolidated Entity .

In the 2025 quarter and 2024 quarter, we recorded equity in loss of unconsolidated entity of $0 and $85,000, respectively, related to our investment in OpenKey.

Other Income (Expense).

Other expense was $1.3 million in the 2025 quarter due to a realized loss on the sale of a portion of CMBS.

Interest Income .

Interest income was $1.5 million and $1.1 million in the 2025 quarter and 2024 quarter, respectively.

The increase in interest income in the 2025 quarter was primarily attributable to higher cash balances in the 2025 quarter compared to the 2024 quarter as well as interest income associated with a tranche of CMBS included in investment in securities.

Interest Expense and Amortization of Loan Costs .

Interest expense and amortization of loan costs decreased $1.9 million, or 7.1%, to $25.4 million in the 2025 quarter compared to the 2024 quarter.

This decrease is primarily due to lower interest expense from lower average interest rates.

The average SOFR rates for the 2025 quarter and the 2024 quarter were 4.33% and 5.33%, respectively.

Write-off of Loan Costs and Exit Fees.

Write-off of loan costs and exit fees was $3,000 in the 2025 quarter.

Write-off of loan costs and exit fees was $82,000 in the 2024 quarter, primarily related to various loan modifications.

Gain (loss) on Extinguishment of Debt.

In 2024 quarter, we recognized a loss of $22,000 attributable to the discount associated with the Cameo Beverly Hills mortgage loan that was repaid on April 9, 2024.

There was no such gain (loss) recognized in the 2025 quarter.

Realized and Unrealized Gain (Loss) on Derivatives .

Realized and unrealized gain on derivatives of $15,000 for the 2025 quarter consisted of a realized gain of $180,000 associated with payments received from counterparties on in-the-money interest rate caps, partially offset by an unrealized loss on interest rate caps of approximately $165,000.

Realized and unrealized gain on derivatives of $326,000 for 2024 quarter consisted of a realized gain of $1.5 million associated with payments received from counterparties on in-the-money interest rate caps, partially offset by an unrealized loss on interest rate caps of approximately $1.2 million.

Income Tax (Expense) Benefit .

Income tax benefit increased $231,000, from $114,000 in the 2024 quarter to $345,000 in the 2025 quarter.

This increase was primarily due to a decrease in the taxable income of certain of our TRS entities in the 2025 quarter compared to the 2024 quarter.

(Income) Loss Attributable to Noncontrolling Interest in Consolidated Entities.

Our noncontrolling interest partners in consolidated entities were allocated income of $115,000 and loss of $303,000 in the 2025 quarter and the 2024 quarter, respectively.

At June 30, 2025, noncontrolling interest in consolidated entities represented an ownership interest of 25% in one hotel property held by one entity and a 25% ownership interest in a JV.

At June 30, 2024, noncontrolling interest in consolidated entities represented an ownership interest of 25% in two hotel properties held by one entity.

Net (Income) Loss Attributable to Redeemable Noncontrolling Interests in Operating Partnership.

Noncontrolling interests in operating partnership were allocated a net loss of $1.5 million and $1.9 million in the 2025 quarter and the 2024 quarter, respectively.

Redeemable noncontrolling interests in Braemar OP represented ownership interests of 8.51% and 8.02% as of June 30, 2025 and 2024, respectively.

Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

The following table summarizes changes in key line items from our condensed consolidated statements of operations for the six months ended June 30, 2025 and 2024 (in thousands except percentages):

Six Months Ended June 30, Favorable (Unfavorable)

2025 2024 $ Change % Change

Rooms $ 245,916 $ 254,779 $ (8,863) (3.5) %

Food and beverage 97,359 101,110 (3,751) (3.7) %

Other 51,622 50,777 845 1.7 %

Total hotel revenue 394,897 406,666 (11,769) (2.9)

13 unchanged sentences

Interest income 3,407 1,868 1,539 82.4

Other income (expense) (1,250) — (1,250) (100.0)

Interest expense and amortization of discounts and loan costs (50,188) (53,776) 3,588 6.7

Write-off of loan costs and exit fees (1,467) (803) (664) (82.7)

Gain (loss) on extinguishment of debt — (22) 22 100.0

Realized and unrealized gain (loss) on derivatives (183) 1,258 (1,441) (114.5)

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Net income (loss) attributable to the Company $ 5,531 $ 4,364 $ 1,167 (26.7) %

All hotel properties owned for the three months ended March 31, 2025 and 2024 have been included in our results of operations during the respective periods in which they were owned.

Based on when a hotel property was acquired or disposed of, operating results for certain hotel properties are not comparable for the three months ended March 31, 2025 and 2024.

All hotel properties owned for the six months ended June 30, 2025 and 2024 have been included in our results of operations during the respective periods in which they were owned.

Based on when a hotel property was acquired or disposed of, operating results for certain hotel properties are not comparable for the six months ended June 30, 2025 and 2024.

The hotel properties listed below are not comparable hotel properties for the periods indicated and all other hotel properties are considered comparable hotel properties.

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July 17, 2024

The following table illustrates the key performance indicators of all hotel properties that were included in our results of operations during the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

The following table illustrates the key performance indicators of all hotel properties that were included in our results of operations during the six months ended June 30, 2025 and 2024:

Six Months Ended June 30,

Occupancy 68.23 % 69.10 %

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Total hotel revenue (in thousands) $ 394,897 $ 406,666

The following table illustrates the key performance indicators of the 15 comparable hotel properties that were owned for the full three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

The following table illustrates the key performance indicators of the 15 comparable hotel properties that were owned for the full six months ended June 30, 2025 and 2024:

Six Months Ended June 30,

Occupancy 68.23 % 68.13 %

4 unchanged sentences

Net Income (Loss) Attributable to the Company.

Net income attributable to the Company decreased $4.9 million from $15.9 million for the three months ended March 31, 2024 (the “2024 quarter”) to $11.0 million for the three months ended March 31, 2025 (the “2025 quarter”), as a result of the factors discussed below.

Net income attributable to the Company decreased $1.2 million from $4.4 million for the six months ended June 30, 2024 (the “2024 period”) to $5.5 million for the six months ended June 30, 2025 (the “2025 period”), as a result of the factors discussed below.

Rooms Revenue .

Rooms revenue decreased $2.5 million to $136.1 million during the 2025 quarter compared to the 2024 quarter primarily due to the sale of the Hilton La Jolla Torrey Pines in July 2024.

During the 2025 quarter, our 15 comparable hotel properties experienced an increase of 4.4% in room rates and a 22 basis point decrease in occupancy compared to the 2024 quarter.

Rooms revenue decreased $8.9 million to $245.9 million during the 2025 period compared to the 2024 period primarily due to the sale of the Hilton La Jolla Torrey Pines in July 2024.

During the 2025 period, our 15 comparable hotel properties experienced a 2.6% increase in room rates and a ten basis point increase in occupancy compared to the 2024 period.

Fluctuations in rooms revenue between the 2025 period and the 2024 period are a result of the changes in occupancy and ADR between the 2025 period and the 2024 period as reflected in the table below (dollars in thousands):

Hotel Property Favorable (Unfavorable)

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Park Hyatt Beaver Creek Resort & Spa (1)

201 (480) 11.0 %

Hotel Yountville (1)

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Hilton La Jolla Torrey Pines $ (14,127) n/a n/a

(1) This hotel was under renovation during the 2025 quarter.

(2) This hotel was under renovation during the 2024 quarter.

(1) This hotel was under renovation during the 2025 period.

(2) This hotel was under renovation during the 2024 period.

Food and Beverage Revenue .

Food and beverage revenue decreased $1.8 million, or 3.3%, to $51.8 million during the 2025 quarter compared to the 2024 quarter.

We experienced an aggregate decrease in food and beverage revenue of $1.3 million at seven comparable hotel properties as well as a decrease of $4.1 million due to the sale of Hilton La Jolla Torrey Pines.

These decreases were partially offset by an aggregate increase of approximately $3.6 million at The Ritz-Carlton Lake Tahoe, Four Seasons Resort Scottsdale, The Ritz-Carlton Reserve Dorado Beach, The Notary Hotel, Marriott Seattle Waterfront, The Ritz-Carlton Sarasota, Pier House Resort & Spa and Bardessono Hotel and Spa.

Food and beverage revenue decreased $3.8 million, or 3.7%, to $97.4 million during the 2025 period compared to the 2024 period.

We experienced an aggregate decrease in food and beverage revenue of $3.5 million at six comparable hotel properties and a decrease of $8.9 million due to the sale of Hilton La Jolla Torrey Pines.

These decreases were partially offset by an aggregate increase of approximately $8.6 million at The Ritz-Carlton Lake Tahoe, Four Seasons Resort Scottsdale, The Ritz-Carlton Sarasota, The Ritz-Carlton Reserve Dorado Beach, The Notary Hotel, Marriott Seattle Waterfront, Pier House Resort & Spa, Bardessono Hotel and Spa and Hotel Yountville.

Other Hotel Revenue .

Other hotel revenue, which consists mainly of condominium management fees, health center fees, resort fees, golf, telecommunications, parking and rentals, increased $960,000, or 3.6%, to $27.9 million during the 2025 quarter compared to the 2024 quarter.

This increase is attributable to higher other hotel revenue of $2.8 million at 11 comparable hotel properties.

These increases were partially offset by a decrease of $1.4 million due to the sale of Hilton La Jolla Torrey Pines as well as an aggregate decrease of approximately $477,000 at Park Hyatt Beaver Creek Resort & Spa, The Ritz-Carlton Reserve Dorado Beach, The Ritz-Carlton Lake Tahoe and The Ritz-Carlton St.

Other hotel revenue, which consists mainly of condominium management fees, health center fees, resort fees, golf, telecommunications, parking and rentals, increased $845,000, or 1.7%, to $51.6 million during the 2025 period compared to the 2024 period.

This increase is attributable to higher other hotel revenue of $4.5 million at ten comparable hotel properties.

These increases were partially offset by a decrease of $2.9 million due to the sale of Hilton La Jolla Torrey Pines and an aggregate decrease of approximately $751,000 at Park Hyatt Beaver Creek Resort & Spa, The Ritz-Carlton St.

Thomas, Hotel Yountville, The Clancy and Sofitel Chicago Magnificent Mile.

Rooms Expense .

Rooms expense decreased $45,000, or 0.2%, to $28.2 million in the 2025 quarter compared to the 2024 quarter.

This decrease is attributable to an aggregate decrease in rooms expense of $137,000 at Sofitel Chicago Magnificent Mile, Hotel Yountville, The Ritz-Carlton Sarasota and Pier House Resort & Spa, as well as a decrease of $1.3 million due to the sale of Hilton La Jolla Torrey Pines.

Rooms expense decreased $236,000, or 0.4%, to $55.5 million in the 2025 period compared to the 2024 period.

This decrease is attributable to an aggregate decrease in rooms expense of $266,000 at Sofitel Chicago Magnificent Mile, Hotel Yountville and Pier House Resort & Spa, and a decrease of $2.8 million due to the sale of Hilton La Jolla Torrey Pines.

These decreases were partially offset by an aggregate increase of $2.8 million at 12 comparable hotel properties.

Food and Beverage Expense .

Food and beverage expense decreased $507,000, or 1.2%, to $40.2 million during the 2025 quarter compared to the 2024 quarter.

Food and beverage expense decreased $1.4 million, or 1.8%, to $76.0 million during the 2025 period compared to the 2024 period.

This decrease is attributable to lower aggregate food and beverage expense of approximately $709,000 at The Ritz-Carlton St.

Thomas, Sofitel Chicago Magnificent Mile, Hotel Yountville and Park Hyatt Beaver Creek Resort & Spa, as well as a decrease of $2.1 million due to the sale of Hilton La Jolla Torrey Pines.

These decreases were partially offset by an aggregate increase of approximately $1.9 million at 11 comparable hotel properties.

Thomas, Cameo Beverly Hills, Park Hyatt Beaver Creek Resort & Spa, Hotel Yountville and Sofitel Chicago Magnificent Mile and a decrease of $4.6 million due to the sale of Hilton La Jolla Torrey Pines.

These decreases were partially offset by an aggregate increase of approximately $3.9 million at ten comparable hotel properties.

Other Operating Expenses .

Other operating expenses increased $300,000, or 0.5%, to $60.4 million in the 2025 quarter compared to the 2024 quarter.

Other operating expenses decreased $1.4 million, or 1.2%, to $116.8 million in the 2025 period compared to the 2024 period.

Other operating expenses consist of direct expenses from departments associated with revenue streams and indirect expenses associated with support departments and incentive management fees.

We experienced a decrease of $311,000 in direct expenses and an increase of $611,000 in indirect expenses and incentive management fees in the 2025 quarter compared to the 2024 quarter.

Direct expenses were 4.4% of total hotel revenue in the 2025 quarter and 4.5% in the 2024 quarter.

The decrease in direct expenses is associated with lower direct expenses of approximately $409,000 at nine comparable hotel properties, as well as $217,000 due to the sale of Hilton La Jolla Torrey Pines.

These decreases were partially offset by higher direct expenses of $315,000 at The Ritz-Carlton Sarasota, Four Seasons Resort Scottsdale, The Notary Hotel, Marriott Seattle Waterfront, Sofitel Chicago Magnificent Mile and Cameo Beverly Hills.

The increase in indirect expenses is comprised of increases in:

(i) general and administrative costs of $1.0 million comprising an aggregate increase of $1.8 million at our 15 comparable hotel properties partially offset by a decrease of $748,000 at the one disposed hotel property;

(ii) incentive management fees of $379,000 at our 15 comparable hotel properties;

and (iii) repairs and maintenance of $148,000 comprising an aggregate increase of $431,000 at our 15 comparable hotel properties partially offset by a decrease of $283,000 at the disposed hotel property.

These increases are partially offset by decreases in:

(i) lease expense of $631,000 comprising of a decrease of $679,000 at the one disposed hotel property partially offset by an aggregate increase of $48,000 at our 15 comparable hotel properties;

(ii) marketing costs of $207,000 comprising an aggregate increase of $725,000 at our 15 comparable hotel properties partially offset by a decrease of $932,000 at the one disposed hotel property;

and (iii) energy costs of $107,000 comprising a decrease of $460,000 at the one disposed hotel property partially offset by an aggregate increase of $353,000 at our 15 comparable hotel properties.

We experienced a decrease of $71,000 in direct expenses and a decrease of $1.3 million in indirect expenses and incentive management fees in the 2025 period compared to the 2024 period.

Direct expenses were 4.5% of total hotel revenue in the 2025 period and 4.4% in the 2024 period.

The decrease in direct expenses is associated with lower direct expenses of approximately $304,000 at eight comparable hotel properties and a decrease of $429,000 due to the sale of Hilton La Jolla Torrey Pines.

These decreases were partially offset by higher direct expenses of $662,000 at The Ritz-Carlton Sarasota, Four Seasons Resort Scottsdale, The Ritz-Carlton Reserve Dorado Beach, The Ritz-Carlton St.

Thomas, The Notary Hotel, Marriott Seattle Waterfront and Cameo Beverly Hills.

The decrease in indirect expenses is comprised of decreases in:

(i) lease expense of $1.6 million comprising of a decrease of $1.7 million at the one disposed hotel property partially offset by an aggregate increase of $135,000 at our 15 comparable hotel properties;

(ii) incentive management fees of $761,000 including $629,000 at our 15 comparable hotel properties and $132,000 at the one disposed hotel property;

and (iii) marketing costs of $275,000 comprising an aggregate decrease of $1.9 million at the one disposed hotel property partially offset by an increase of $1.6 million at our 15 comparable hotel properties.

These decreases were partially offset by increases in:

(i) general and administrative costs of $928,000 comprising an aggregate increase of $2.6 million at our 15 comparable hotel properties partially offset by a decrease of $1.7 million at the one disposed hotel property;

(ii) repairs and maintenance of $318,000 comprising an aggregate increase of $936,000 at our 15 comparable hotel properties partially offset by a decrease of $618,000 at the disposed hotel property;

and (iii) energy costs of $6,000 comprising an aggregate increase of $906,000 at our 15 comparable hotel properties partially offset by a decrease of $900,000 at the one disposed hotel property.

Management Fees .

Base management fees decreased $66,000, or 0.9%, to $6.9 million in the 2025 quarter compared to the 2024 quarter.

Base management fees decreased $593,000, or 4.5%, to $12.5 million in the 2025 period compared to the 2024 period.

Management fees decreased $315,000 at six comparable hotel properties and $777,000 due to the sale of Hilton La Jolla Torrey Pines.

These decreases were partially offset by an aggregate increase of $366,000 at The Ritz-Carlton Reserve Dorado Beach, The Notary Hotel, Capital Hilton, Four Seasons Resort Scottsdale, The Clancy, Marriott Seattle Waterfront, Bardessono Hotel and Spa, Pier House Resort & Spa and Cameo Beverly Hills.

These decreases were partially offset by an aggregate increase of $499,000 at The Ritz-Carlton Reserve Dorado Beach, Four Seasons Resort Scottsdale, The Clancy, The Notary Hotel, Marriott Seattle Waterfront, Pier House Resort & Spa, Capital Hilton, Bardessono Hotel and Spa and The Ritz-Carlton Lake Tahoe.

Property Taxes, Insurance and Other .

Property taxes, insurance and other decreased $220,000, or 2.1%, to $10.5 million in the 2025 quarter compared to the 2024 quarter.

This decrease is primarily attributable to a decrease of $789,000 due to the sale of Hilton La Jolla Torrey Pines and an aggregate decrease of $344,000 at six comparable hotel properties.

These decreases were partially offset by an aggregate increase of approximately $913,000 at nine comparable hotel properties.

Property taxes, insurance and other decreased $2.4 million, or 11.6%, to $18.4 million in the 2025 period compared to the 2024 period.

This decrease is primarily attributable to a decrease of $1.6 million due to the sale of Hilton La Jolla Torrey Pines and an aggregate decrease of $1.5 million at nine comparable hotel properties.

These decreases were partially offset by an aggregate increase of approximately $680,000 at six comparable hotel properties.

Depreciation and Amortization .

Depreciation and amortization decreased $2.0 million, or 8.0%, to $23.4 million for the 2025 quarter compared to the 2024 quarter.

This decrease is comprised of a decrease of $1.1 million due to the sale of Hilton La Jolla Torrey Pines and an aggregate decrease of $3.1 million at Capital Hilton, The Notary Hotel, The Clancy, Pier House Resort & Spa, The Ritz-Carlton St.

Thomas, Sofitel Chicago Magnificent Mile, Marriott Seattle Waterfront.

Depreciation and amortization decreased $3.4 million, or 6.7%, to $46.8 million for the 2025 period compared to the 2024 period.

This decrease is comprised of a decrease of $2.1 million due to the sale of Hilton La Jolla Torrey Pines and an aggregate decrease of $5.3 million at The Ritz-Carlton St.

Thomas, Capital Hilton, The Clancy, The Notary Hotel, Pier House Resort & Spa, Marriott Seattle Waterfront and Sofitel Chicago Magnificent Mile.

These decreases were partially offset by an aggregate increase of $4.0 million at eight comparable hotel properties.

Advisory Services Fee.

Advisory services fee decreased $89,000, or 1.3%, to $6.6 million in the 2025 quarter compared to the 2024 quarter due to lower equity-based compensation of $1.2 million, partially offset by higher reimbursable expenses of $736,000, higher base advisory fee of $249,000 and a higher incentive fee of $82,000.

In the 2025 quarter, we recorded an advisory services fee of $6.6 million, which included a base advisory fee of $3.6 million, reimbursable expenses of $3.0 million, an incentive fee of $82,000 and a credit to expense of $48,000 associated with equity grants of our common stock and LTIP units awarded to the officers and employees of Ashford Inc.

In the 2024 quarter, we recorded an advisory services fee of $6.7 million, which included a base advisory fee of $3.3 million, reimbursable expenses of $2.3 million and $1.1 million associated with equity grants of our common stock and LTIP units awarded to the officers and employees of Ashford Inc.

Advisory services fee decreased $726,000, or 5.0%, to $13.8 million in the 2025 period compared to the 2024 period due to lower equity-based compensation of $2.1 million and a lower incentive fee of $378,000, partially offset by higher reimbursable expenses of $1.4 million and a higher base advisory fee of $390,000.

In the 2025 period, we recorded an advisory services fee of $13.8 million, which included a base advisory fee of $7.1 million, reimbursable expenses of $6.6 million, an incentive fee of $270,000 and a credit to expense of $99,000 associated with equity grants of our common stock and LTIP units awarded to the officers and employees of Ashford Inc.

In the 2024 period, we recorded an advisory services fee of $14.5 million, which included a base advisory fee of $6.7 million, reimbursable expenses of $5.2 million, $2.0 million associated with equity grants of our common stock and LTIP units awarded to the officers and employees of Ashford Inc.

and an incentive fee of $648,000.

Corporate General and Administrative .

Corporate general and administrative expense was $2.9 million in the 2025 quarter compared to $(2.2) million in the 2024 quarter.

The increase in corporate general and administrative expenses is primarily attributable to a revision to the estimated contribution amount associated with the Fourth Amended and Restated Contribution Agreement with Ashford Securities that resulted in a $5.6 million expense reduction in the 2024 quarter as well as higher public company costs of $149,000 and higher miscellaneous expenses of $488,000 in the 2025 quarter.

These increases were partially offset by lower professional fees of $1.1 million.

Corporate general and administrative expense was $596,000 in the 2025 period and consisted of $3.1 million in professional fees, $1.6 million of public company costs and $839,000 in miscellaneous expenses.

These expenses were partially offset by an expense reduction of $5.0 million from an insurance recovery for prior legal expenses.

Corporate general and administrative expense was $2.2 million in the 2024 period and consisted of $6.2 million in professional fees, $1.1 million in public company costs, and $602,000 in miscellaneous expenses.

Additionally, during the 2024 period there was a revision to the estimated contribution amount associated with the Fourth Amended and Restated Contribution Agreement with Ashford Securities that resulted in a $5.6 million reduction to expense.

Equity in Earnings (Loss) of Unconsolidated Entity .

In the 2024 quarter we recorded equity in loss of unconsolidated entity of $49,000 related to our investment in OpenKey.

There was no equity in earnings (loss) in the 2025 quarter as a result of impairing the OpenKey investment in the fourth quarter of 2024.

There was no equity in earnings (loss) of unconsolidated entity in the 2025 period as a result of impairing the OpenKey investment in the fourth quarter of 2024.

In the 2024 period we recorded equity in loss of unconsolidated entity of $134,000 related to our investment in OpenKey.

Other Income (Expense).

Other expense was $1.3 million in the 2025 period due to a realized loss from the sale of a portion of CMBS.

Interest Income .

Interest income was $1.9 million and $796,000 in the 2025 quarter and the 2024 quarter, respectively.

The increase in interest income in the 2025 quarter was primarily attributable to interest income associated with a tranche of CMBS included in investment in securities in the 2025 quarter compared to the 2024 quarter, partially offset by lower excess cash balances.

Interest income was $3.4 million and $1.9 million in the 2025 period and the 2024 period, respectively.

The increase in interest income in the 2025 period was primarily attributable to interest income associated with a tranche of CMBS included in investment in securities in the 2025 period compared to the 2024 period, partially offset by lower excess cash balances.

Interest Expense and Amortization of Discounts and Loan Costs .

Interest expense and amortization of discounts and loan costs decreased $1.7 million, or 6.3%, to $24.8 million for the 2025 quarter compared to the 2024 quarter.

The decrease is primarily due to lower interest expense from lower average interest rates in the 2025 quarter partially offset by higher amortization of loan costs of approximately $821,000 in the 2025 quarter compared to the 2024 quarter.

The average SOFR rates for the 2025 quarter and the 2024 quarter were 4.32% and 5.33%, respectively.

Interest expense and amortization of discounts and loan costs decreased $3.6 million, or 6.7%, to $50.2 million for the 2025 period compared to the 2024 period.

The decrease is primarily due to lower interest expense from lower average interest rates in the 2025 period partially offset by higher amortization of loan costs of approximately $2.1 million in the 2025 period compared to the 2024 period.

The average SOFR rates for the 2025 period and the 2024 period were 4.34% and 5.33%, respectively.

Write-off of Loan Costs and Exit Fees.

Write-off of loan costs and exit fees was $1.5 million in the 2025 quarter related to various loan refinances and modifications.

Write-off of loan costs and exit fees was $721,000 in the 2024 quarter related to related to various loan modifications.

Write-off of loan costs and exit fees was $1.5 million in the 2025 period related to various loan refinances and modifications.

Write-off of loan costs and exit fees was $803,000 in the 2024 period related to various loan modifications.

Realized and Unrealized Gain (Loss) on Derivatives .

Realized and unrealized loss on derivatives of $198,000 for the 2025 quarter consisted of an unrealized loss on interest rate caps of $386,000, partially offset by a realized gain of $188,000 associated with payments received from counterparties on in-the-money interest rate caps.

Realized and unrealized gain on derivatives of $932,000 for the 2024 quarter primarily consisted of a realized gain of $1.7 million associated with payments received from counterparties on in-the-money interest rate caps, partially offset by an unrealized loss on interest rate caps of approximately $751,000.

Realized and unrealized loss on derivatives of $183,000 for the 2025 period consisted of an unrealized loss on interest rate caps of $551,000, partially offset by a realized gain of $368,000 associated with payments received from counterparties on in-the-money interest rate caps.

Realized and unrealized gain on derivatives of $1.3 million for the 2024 period primarily consisted of an unrealized gain on warrants of $12,000 and a realized gain of $3.2 million associated with payments received from counterparties on in-the-money interest rate caps, partially offset by an unrealized loss on interest rate caps of approximately $2.0 million.

Income Tax (Expense) Benefit .

Income tax expense increased $15,000, from $1.5 million in the 2024 quarter to $1.5 million in the 2025 quarter.

Income tax expense decreased $216,000, from $1.3 million in the 2024 period to $1.1 million in the 2025 period.

This decrease was primarily due to a decrease in the taxable income of certain of our TRS entities in the 2025 period compared to the 2024 period.

(Income) Loss Attributable to Noncontrolling Interest in Consolidated Entities .

Our noncontrolling interest partner in consolidated entities was allocated a loss of $64,000 and $743,000 in the 2025 quarter and the 2024 quarter, respectively.

As of March 31, 2025, noncontrolling interest in consolidated entities represented an ownership interest of 25% in one hotel property held by one entity.

As of March 31, 2024, noncontrolling interest in consolidated entities represented an ownership interest of 25% in two hotel properties held by one entity.

Our noncontrolling interest partners in consolidated entities were allocated income of $51,000 and a loss $1.0 million in the 2025 period and the 2024 period, respectively.

As of June 30, 2025, noncontrolling interest in consolidated entities represented an ownership interest of 25% in one hotel property held by one entity and a 25% ownership interest in a JV.

As of June 30, 2024, noncontrolling interest in consolidated entities represented an ownership interest of 25% in two hotel properties held by one entity.

Net (Income) Loss Attributable to Redeemable Noncontrolling Interests in Operating Partnership.

Noncontrolling interests in operating partnership were allocated a net loss of $262,000 in the 2025 quarter and net income of $296,000 in the 2024 quarter.

Redeemable noncontrolling interests represented ownership interests in Braemar OP of approximately 9.33% and 7.75% as of March 31, 2025 and 2024, respectively.

Noncontrolling interests in operating partnership were allocated a net loss of $1.8 million in the 2025 period and $1.6 million in the 2024 period.

Redeemable noncontrolling interests represented ownership interests in Braemar OP of approximately 8.51% and 8.02% as of June 30, 2025 and 2024, respectively.

LIQUIDITY AND CAPITAL RESOURCES

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Our loan that is in a cash trap may remain subject to the cash trap provisions for a substantial period of time which could limit our flexibility and adversely affect our financial condition or our qualification as a REIT.

As of March 31, 2025, the mortgage loan secured by The Ritz-Carlton Lake Tahoe was in a cash trap.

The amount of cash in the cash trap as of March 31, 2025 was $0.

As of March 31, 2025, the Company held cash and cash equivalents of $81.7 million and restricted cash of $54.5 million, the vast majority of which is comprised of lender and manager-held reserves.

As of March 31, 2025, $25.5 million was also due to the Company from third-party hotel managers, most of which is held by one of the Company’s managers and is available to fund hotel operating costs.

As of March 31, 2025, our net debt to gross assets was 42.3%.

As of June 30, 2025, the mortgage loan secured by The Ritz-Carlton Lake Tahoe was in a cash trap.

The amount of cash in the cash trap as of June 30, 2025 was $0.

As of June 30, 2025, the Company held cash and cash equivalents of $80.2 million and restricted cash of $55.5 million, the vast majority of which is comprised of lender and manager-held reserves.

As of June 30, 2025, $24.2 million was also due to the Company from third-party hotel managers, most of which is held by one of the Company’s managers and is available to fund hotel operating costs.

As of June 30, 2025, our net debt to gross assets was 44.2%.

The Company’s cash and cash equivalents are primarily comprised of corporate cash invested in short-term U.S.

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The Company may also sell some or all of the shares of our common stock to Virtu as principal for its own account at a price agreed upon at the time of sale.

As of May 6, 2025, the Company has sold approximately 4.7 million shares of common stock under the Virtu July 2021 EDA and received gross proceeds of approximately $24.0 million.

As of August 6, 2025, the Company has sold approximately 4.7 million shares of common stock under the Virtu July 2021 EDA and received gross proceeds of approximately $24.0 million.

On May 3, 2024, our board of directors approved a new share repurchase program, pursuant to which the board of directors granted a repurchase authorization to acquire shares of the Company’s common stock, par value $0.01 per share, having an aggregate value of up to $50 million.

2 unchanged sentences

The board of directors’ authorization replaced any previous repurchase authorizations.

As of May 6, 2025, the Company has not repurchased any common stock pursuant to the plan.

As of August 6, 2025, the Company has not repurchased any common stock pursuant to the plan.

Debt Transactions

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The appraisals valued the hotels at $742 million based on the sum of their “as-is” values.

On April 4, 2025, the Company assumed a $5.4 million term loan secured by a parcel of land.

The assumed term loan is interest only, bears interest at WSJ Prime Rate, and matures in March 2026.

This term loan has a floor of 4.99%.

On July 25, 2025, we amended the mortgage loan secured by The Ritz-Carlton Lake Tahoe.

Terms of the amendment included extending the maturity date from July 2025 to July 2026.

Additionally, the Company repaid approximately $88.4 million on the mortgage loan that was partially secured by the hotel property.

Sources and Uses of Cash

We had approximately $81.7 million and $135.5 million of cash and cash equivalents at March 31, 2025 and December 31, 2024, respectively.

We had approximately $80.2 million and $135.5 million of cash and cash equivalents at June 30, 2025 and December 31, 2024, respectively.

We anticipate that our principal sources of funds to meet our cash requirements will include cash on hand, positive cash flow from operations and capital market activities.

Net Cash Flows Provided by (Used in) Operating Activities.

Net cash flows provided by operating activities were $15.1 million and $36.0 million for the three months ended March 31, 2025 and 2024, respectively.

Net cash flows provided by operating activities were $38.2 million and $60.2 million for the six months ended June 30, 2025 and 2024, respectively.

Cash flows from operations were impacted by changes in hotel operations and the disposition of a hotel property in the third quarter of 2024.

1 unchanged sentence

Net Cash Flows Provided by (Used in) Investing Activities .

For the three months ended March 31, 2025, net cash flows used in investing activities were $14.2 million.

The cash outflows were primarily attributable to $15.3 million of capital improvements made to various hotel properties, partially offset by cash inflows of $1.1 million from property insurance proceeds.

For the six months ended June 30, 2025, net cash flows used in investing activities were $11.7 million.

The cash outflows were primarily attributable to $33.0 million of capital improvements made to various hotel properties and acquisition of land of $5.5 million, partially offset by cash inflows of $23.8 million from sale of investment in securities and $3.1 million from property insurance proceeds.

Our capital improvements consisted of approximately $23.2 million of return on investment capital projects and approximately $9.9 million of renewal and replacement capital projects.

For the three months ended March 31, 2024, net cash flows used in investing activities were $22.8 million.

For the six months ended June 30, 2024, net cash flows used in investing activities were $38.7 million.

These cash outflows were primarily attributable to $39.2 million of capital improvements made to various hotel properties partially offset by cash inflows of $542,000 related to proceeds from property insurance.

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Net Cash Flows Provided by (Used in) Financing Activities.

For the three months ended March 31, 2025, net cash flows used in financing activities were $49.8 million.

Cash outflows primarily consisted of $365.2 million of repayments of indebtedness, $26.2 million for cash redemptions of Series E and Series M preferred stock, $12.2 million of dividend and distribution payments, $8.9 million of payments of loan costs and exit fees, $508,000 to purchase interest rate caps, and $92,000 from the redemption of operating partnership units.

These cash outflows were partially offset by cash inflows of $363.0 million from borrowings on indebtedness, and $244,000 of proceeds from in-the-money interest rate caps.

For the three months ended March 31, 2024, net cash flows provided by financing activities were $39.7 million.

Cash inflows primarily consisted of cash inflows of $62.0 million from borrowings on indebtedness and $1.6 million of proceeds from in-the-money interest rate caps.

These cash inflows were partially offset by cash outflows primarily consisting of $13.1 million of dividend and distribution payments, $991,000 to purchase interest rate caps, $3.2 million of payments of loan costs and exit fees, and $6.6 million for cash redemptions of Series E and Series M preferred stock.

For the six months ended June 30, 2025, net cash flows used in financing activities were $75.9 million.

Cash outflows primarily consisted of $365.2 million of repayments of indebtedness, $40.7 million for cash redemptions of Series E and Series M preferred stock, $24.2 million of dividend and distribution

payments, $8.9 million of payments of loan costs and exit fees, $508,000 to purchase interest rate caps, and $92,000 from the redemption of operating partnership units.

These cash outflows were partially offset by cash inflows of $363.0 million from borrowings on indebtedness, $424,000 of proceeds from in-the-money interest rate caps and a contribution of $306,000 from a noncontrolling interest holder in a consolidated entity.

For the six months ended June 30, 2024, net cash flows provided by financing activities were $6.9 million.

Cash outflows primarily consisted of $30.0 million of repayments of indebtedness, $26.2 million of dividend and distribution payments, $1.3 million to purchase interest rate caps, $3.3 million of payments of loan costs and exit fees and $11.0 million for cash redemptions of Series E and Series M preferred stock.

These cash outflows were partially offset by cash inflows of $62.0 million from borrowings on indebtedness and $3.3 million of proceeds from in-the-money interest rate caps.

Dividend Policy

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The Company expects to pay a quarterly cash dividend of $0.05 per share for the Company’s common stock for 2025, or $0.20 per share on an annualized basis.

On January 13, 2025, our board of directors declared a quarterly cash dividend of $0.05 per diluted share for the first quarter of 2025.

On April 2, 2025, our board of directors declared a quarterly cash dividend of $0.05 per diluted share for the second quarter of 2025.

On July 10, 2025, our board of directors declared a quarterly cash dividend of $0.05 per diluted share for the third quarter of 2025.

The approval of our dividend policy does not commit our board of directors to declare future dividends with respect to any quantity or the amount thereof.

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EBITDA, EBITDAre and Adjusted EBITDAre as calculated by us may not be comparable to EBITDA, EBITDAre and Adjusted EBITDAre reported by other companies that do not define EBITDA, EBITDAre and Adjusted EBITDAre exactly as we define the terms.

as an indicator of performance or as an alternative to cash flows from operating activities as determined by GAAP as an indicator of liquidity.

EBITDA, EBITDAre and Adjusted EBITDAre do not represent cash generated from operating activities determined in accordance with GAAP, and should not be considered as an alternative to operating income or net income determined in accordance with GAAP as an indicator of performance or as an alternative to cash flows from operating activities as determined by GAAP as an indicator of liquidity.

The following table reconciles net income (loss) to EBITDA, EBITDAre and Adjusted EBITDAre (in thousands) (unaudited):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Net income (loss) $ (6,841) $ (13,787) $ 3,831 $ 1,695

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Company’s portion of EBITDA of OpenKey — (82) — (139)

EBITDA and EBITDAre

41,535 38,081 101,896 106,918

(Gain) loss on disposition of assets and hotel property

EBITDAre 60,361 68,837

Amortization of favorable (unfavorable) contract assets (liabilities) 107 118 214 237

Transaction and conversion costs (1)

471 53 1,166 (5,574)

Write-off of premiums, loan costs and exit fees 3 82 1,467 803

2 unchanged sentences

Legal, advisory and settlement costs (2)

(4,626) 2,870 (4,482) 4,817

Advisory services incentive fee 188 648 270 648

(Gain) loss on extinguishment of debt — 22 — 22

Other (income) expense

1,250 — 1,250 —

Company’s portion of adjustments to EBITDAre of OpenKey — 3 — 3

Adjusted EBITDAre $ 38,866 $ 42,686 $ 101,869 $ 108,878

1 unchanged sentence

(1) Includes amounts associated with funding certain expenses of Ashford Securities LLC, which in 2024 included a true up of these expenses based on capital raised.

(2) Includes amounts related to a $5.0 million expense reduction in 2025 from an insurance recovery for prior legal expenses.

FFO is calculated on the basis defined by NAREIT, which is net income (loss) attributable to common stockholders, computed in accordance with GAAP, excluding gains or losses on disposition of assets, plus impairment charges on real estate, depreciation and amortization of real estate assets, and after redeemable noncontrolling interests in the operating partnership and adjustments for unconsolidated entities.

12 unchanged sentences

The following table reconciles net income (loss) to FFO and Adjusted FFO (in thousands) (unaudited):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Net income (loss) $ (6,841) $ (13,787) $ 3,831 $ 1,695

12 unchanged sentences

Deemed dividends on preferred stock

1,559 26 5,835 2,024

Transaction and conversion costs (2)

471 53 1,166 (5,574)

Write-off of premiums, loan costs and exit fees 3 82 1,467 803

2 unchanged sentences

Legal, advisory and settlement costs (3)

(4,626) 2,870 (4,482) 4,817

Interest expense accretion on refundable membership club deposits 135 150 286 315

Amortization of loan costs (1)

2,651 1,319 4,748 2,527

Advisory services incentive fee 188 648 270 648

(Gain) loss on extinguishment of debt — 22 — 22

Other (income) expense

1,250 — 1,250 —

Company’s portion of adjustments to FFO of OpenKey — 3 — 3

Adjusted FFO available to common stockholders and OP unitholders $ 6,932 $ 7,368 $ 36,046 $ 37,628

2 unchanged sentences

The following table presents the amounts of the adjustments for noncontrolling interests for each line item:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Depreciation and amortization on real estate $ (670) $ (998) $ (1,389) $ (2,238)

1 unchanged sentence

(2) Includes amounts associated with funding certain expenses of Ashford Securities LLC, which in 2024 included a true up of these expenses based on capital raised.

The following table presents certain information related to our hotel properties as of March 31, 2025:

(3) Includes amounts related to a $5.0 million expense reduction in 2025 from an insurance recovery for prior legal expenses.

The following table presents certain information related to our hotel properties as of June 30, 2025:

Hotel Property Location Total Rooms % Owned Owned Rooms

32 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis