What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-06 compared with 2026-05-07 · 351 added, 136 removed, 376 unchanged (56% of the section changed)

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

As of March 31, 2026, we owned interests in 13 hotel properties in six states, the District of Columbia, Puerto Rico and St.

As of June 30, 2026, we owned interests in 12 hotel properties in five states, the District of Columbia, Puerto Rico and St.

Virgin Islands with 2,831 total rooms.

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

As of March 31, 2026, Remington Hospitality, a subsidiary of Ashford Inc., managed five of our 13 hotel properties.

As of June 30, 2026, Remington Hospitality, a subsidiary of Ashford Inc., managed five of our 12 hotel properties.

Third-party management companies managed the remaining hotel properties.

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Archie Bennett, Jr.

(together, the “Bennetts”), as of March 31, 2026, hold a controlling interest in Ashford Inc.

(together, the “Bennetts”), as of June 30, 2026, hold a controlling interest in Ashford Inc.

The Bennetts owned approximately 810,123 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 4,745,833 shares of Ashford Inc.

common stock, which if converted as of March 31, 2026, would have increased the Bennetts’ ownership interest in Ashford Inc.

common stock, which if converted as of June 30, 2026, would have increased the Bennetts’ ownership interest in Ashford Inc.

The 18,777,914 shares of Series D Convertible Preferred Stock owned by Mr.

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Additionally, Mr.

Bennett acquired the right to direct votes, effective March 25, 2025, and as of March 31, 2026, those rights represented approximately 534,000 common shares.

As of March 31, 2026, Mr.

Bennett acquired the right to direct votes, effective March 25, 2025, and as of June 30, 2026, those rights represented approximately 534,000 common shares.

As of June 30, 2026, Mr.

Bennett and Mr.

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Recent Developments

On February 20, 2026, our board of directors, in consultation with counsel, in compliance with Article II, Section 12 of the Company’s bylaws, voted unanimously (with Mr.

Ghassemieh recused) to determine that Mr.

Ghassemieh was in breach of the cooperation agreement entered into on August 25, 2025 between the Company, Ashford Trust, Ashford Inc.

Ghassemieh (the “Ghassemieh Agreement”).

Accordingly, pursuant to Section 4(a)(ii) of the Ghassemieh Agreement, Mr.

Ghassemieh’s irrevocable resignation letter executed by Mr.

Ghassemieh in connection with the Ghassemieh Agreement became effective on February 20, 2026.

On March 5, 2026, Ashford Inc.

and Ashford LLC agreed with Deric Eubanks, the Chief Financial Officer of Ashford Inc., and Ashford LLC that, effective March 31, 2026 (the “Termination Date”), Mr.

Eubanks would terminate employment with and service to Ashford Inc., Ashford LLC and their affiliates.

Eubanks was also the Chief Financial Officer of the Company and Ashford Trust and accordingly his service as Chief Financial Officer of each of the Company and Ashford Trust ended effective as of the Termination Date.

Effective on the Termination Date, Justin Coe, the Company’s current Chief Accounting Officer and principal accounting officer, assumed the role of principal financial officer of the Company.

On March 31, 2026, the Advisor delivered written notice to the Company of the Advisor’s election to extend the term of our advisory agreement (the “Extension Notice”).

Pursuant to Section 12.2 of our advisory agreement, the Advisor exercised its right to extend the agreement for an additional ten-year term, commencing on January 24, 2027 and expiring on January 24, 2037.

All terms, conditions, rights and obligations under our advisory agreement will remain in full force and effect during the extended term, subject to Section 6.6 of our advisory agreement that provides the parties to our advisory agreement the right to renegotiate the amount of the Base Fee or Incentive Fee (as such terms are defined in our advisory agreement) payable by the Company.

On April 23, 2026, the Company announced that its board of directors declared and set aside the April 2026 portion of the second quarter 2026 dividends for its Series B Convertible Preferred Stock, Series D Preferred Stock, Series E Preferred Stock and Series M Preferred Stock.

On April 27, 2026, the Company entered into an Agreement of Purchase and Sale (the “Agreement”) for the sale of Park Hyatt Beaver Creek Resort & Spa located in Avon, Colorado for $176 million in cash, subject to customary pro-rations and adjustments.

The agreement included a $6.5 million nonrefundable deposit.

The sale is scheduled to close in the second quarter of 2026, subject to customary closing conditions.

On May 26, 2026, the Company sold the Park Hyatt Beaver Creek Resort & Spa for $176 million in cash, subject to customary pro-rations and adjustments.

Additionally, the Company repaid the $70.5 million mortgage loan that was secured by the hotel property.

On June 12, 2026, the Company announced a series of actions designed to simplify its corporate structure, reduce costs, enhance governance and position the Company for long-term profitability and value creation.

Following the conclusion of a lengthy strategic review process, and upon the recommendation of a Special Committee comprised solely of independent directors (the “Special Committee”), the BHR Board of Directors (the “Board”) has approved a management spin-out, which will enable Braemar to become a self-managed real estate investment trust (REIT).

These actions include the initiation of steps to terminate the Fifth Amended and Restated Advisory Agreement (the “Advisory Agreement”) with Ashford Inc.

and its affiliates (“Ashford”), hire employees directly, and reconstitute the Company’s Board.

Benefits for Shareholders

• A focused business generating significant revenue:

On a go-forward basis, the Company intends to maintain a portfolio of approximately six to eight luxury properties across the U.S.

and the Caribbean, which had a gross asset value of over $1 billion and generated total annual revenue of $300 to $350 million as of the trailing twelve months ending March 31, 2026.

• Long-term cost savings:

The Company intends to directly hire employees and relocate to new office space, headquartered in Dallas.

By directly employing its own management team, Braemar expects to reduce G&A costs by more than $25 million per year.

Based on prevailing industry EBITDA multiples, ranging from 11-13x, these savings imply significant potential equity value accretion.

• Board and management fully aligned with shareholders’ best interests:

The in-house management structure and a new Board are designed to improve shareholder alignment.

The Company has retained Ferguson Partners, an independent executive search firm, to identify five new independent Board members.

The new Board members will be appointed to the Board, with the existing directors simultaneously stepping down, at the termination of the Advisory Agreement and will also be nominated for election at the Company’s next annual meeting.

• No disruption to management team:

Certain members of the management team currently employed by Ashford will become employees of Braemar, who will work exclusively for the Company and have no ongoing relationship with Ashford or its affiliates.

The Special Committee and the entire Board has worked tirelessly to exhaust all available options to maximize shareholder value.

While initially a sale of the Company was explored, the Special Committee ultimately concluded that there was a superior value creation available by terminating the Advisory Agreement, spinning out management, and remaining publicly listed.

While the directors have agreed to formally resign their positions, they remain devoted to the future success of the Company.

Transition to Self-Managed REIT

As part of the transition, Braemar will terminate the Advisory Agreement and all other material legacy contractual arrangements with Ashford and its affiliates.

Following the termination, management, including Mr.

Richard Stockton, will be employed directly by Braemar.

This new structure is expected to reduce Braemar’s general and administrative costs by more than $25 million annually.

Furthermore, by canceling the Ashford Master Agreements, the Company will be free to utilize any third-party company to provide property management, project management or other services at the Company’s hotels.

The new self-management structure was recommended by the Special Committee and approved by the independent members of the full Board.

Board Refreshment and Corporate Governance Enhancements

Five new independent directors will be identified and added to the Board.

Concurrent with these appointments, all existing directors (including the Chairman, Mr.

Monty Bennett), except for Mr.

Richard Stockton, have agreed to step down from the Board to make way for the new directors.

The reconstituted Board will have an independent Chairman.

The Company has retained Ferguson Partners to assist in the search for new directors, with a focus on ensuring that they collectively possess the right mix of skills and experience to oversee the Company and shape its future strategy.

No individuals

will be appointed who have existing or prior relationships with Ashford, its Chairman and Chief Executive Officer, Monty J.

Bennett, or Archie Bennett Jr.

Governance Reforms

The Company is also taking steps to implement best-practice corporate governance reforms to better align the Company with the best interests of all shareholders, including a thorough review and revision of the Company’s Bylaws, Corporate Governance Guidelines, Code of Ethics and Board Committee Charters.

Additionally, Braemar will terminate its contractual relationships with Premier Project Management LLC and Remington Lodging & Hospitality, LLC, both of which are subsidiaries of Ashford Inc.

Certain immaterial, short-term contracts will be retained with Inspire, Pure and RED Hospitality to avoid disrupting existing hotel operations.

The Company Sale Fee will be triggered under the Advisory Agreement with Ashford upon the closing of previously announced asset sales.

Net sale proceeds from future asset sales, after working capital needs and other reserves, will be transferred to Ashford to pay down a portion or all of the Company Sale Fee.

The Company does not intend to sell all or substantially all of its assets, only the approximate number necessary to satisfy the Company’s obligation to pay the Company Sale Fee and Master Agreement Termination Fee.

On June 25, 2026 the Company extended its $43.4 million mortgage loan secured by The Ritz-Carlton Lake Tahoe.

The loan had an initial maturity date of July 15, 2026 and now has a maturity date of October 15, 2026.

An additional three-month maturity extension is also available at the Company’s discretion on the same terms.

On July 13, 2026, the Company entered into a definitive agreement to sell the Pier House Resort & Spa for a purchase price of $190 million in cash, subject to customary pro-rations and adjustments.

The agreement included a nonrefundable deposit of $6.0 million.

On July 14, 2026, the Company completed the sale of the Ritz-Carlton Sarasota, the Bardessono Hotel and Spa and the Hotel Yountville for a purchase price of $437.5 million in cash, subject to customary pro-rations and adjustments.

Additionally, the Company repaid approximately $232.8 million on the mortgage loan that was partially secured by the hotel properties.

Upon closing, the Company Sale Fee was triggered under the Advisory Agreement with Ashford Inc., and as a result, the Company incurred a related liability of $480.0 million during the third quarter of 2026.

The Company subsequently paid $173.0 million to Ashford Inc.

to pay down a portion of the Company Sale Fee.

In July 2026, the Company exercised its put option to require the noncontrolling interest holder to repurchase the Company’s interest in CR JV, a joint venture that owns a parcel of land and is consolidated by the Company.

As a result, in August 2026, the noncontrolling interest holder repurchased CR JV for $6.3 million and, in conjunction with the repurchase, the Company derecognized the land and the related mortgage loan secured by the land.

Key Indicators of Operating Performance

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RevPAR does not include revenues from food and beverage sales or parking, telephone or other non-rooms revenues generated by the property.

Although RevPAR does not include these ancillary revenues, it is generally considered the leading indicator of core revenues for many hotels.

Although RevPAR does not include these ancillary revenues, it is generally considered the

leading indicator of core revenues for many hotels.

We also use RevPAR to compare the results of our hotels between periods and to analyze results of our comparable hotels (comparable hotels represent hotels we have owned for the entire period).

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RESULTS OF OPERATIONS

Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025

The following table summarizes changes in key line items from our condensed consolidated statements of operations for the three months ended March 31, 2026 and 2025 (in thousands except percentages):

Three Months Ended March 31, Favorable (Unfavorable)

Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025

The following table summarizes changes in key line items from our condensed consolidated statements of operations for three months ended June 30, 2026 and 2025 (in thousands except percentages):

Three Months Ended June 30, Favorable (Unfavorable)

2026 2025 $ Change % Change

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Total expenses 157,810 161,183 3,373 2.1

Gain (loss) on disposition of assets and hotel properties

Gain (loss) on disposition of assets and hotel property 17,395 — 17,395

Operating income (loss) 30,611 17,894 12,717 71.1

Equity in earnings (loss) of unconsolidated entity (31) — (31)

Interest income 774 1,519 (745) (49.0)

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

Interest expense and amortization of discounts and loan costs (20,513) (25,361) 4,848 19.1

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Net income (loss) attributable to the Company $ 7,038 $ (5,467) $ 12,505 228.7 %

All hotel properties owned for the three months ended March 31, 2026 and 2025 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, 2026 and 2025.

All hotel properties owned for the three months ended June 30, 2026 and 2025 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, 2026 and 2025.

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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November 6, 2025

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, 2026 and 2025:

Three Months Ended March 31,

Park Hyatt Beaver Creek Resort & Spa

Avon, Colorado

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, 2026 and 2025:

Three Months Ended June 30,

Occupancy 70.84 % 71.85 %

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Total hotel revenue (in thousands) $ 171,026 $ 179,077

The following table illustrates the key performance indicators of the 13 comparable hotel properties that were owned for the full three months ended March 31, 2026 and 2025:

Three Months Ended March 31,

The following table illustrates the key performance indicators of the 12 hotel properties that were owned for the full three months ended June 30, 2026 and 2025:

Three Months Ended June 30,

Occupancy 72.61 % 73.10 %

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Net Income (Loss) Attributable to the Company.

Net income attributable to the Company increased $6.7 million from $11.0 million for the three months ended March 31, 2025 (the “2025 quarter”) to $17.7 million for the three months ended March 31, 2026 (the “2026 quarter”), as a result of the factors discussed below.

Net income (loss) attributable to the Company changed $12.5 million, from a net loss of $5.5 million for the three months ended June 30, 2025 (the “2025 quarter”) to net income of $7.0 million for the three months ended June 30, 2026 (the “2026 quarter”), as a result of the factors discussed below.

Rooms Revenue .

Rooms revenue decreased $7.3 million to $128.8 million during the 2026 quarter compared to the 2025 quarter primarily due to the sales of Marriott Seattle Waterfront in August 2025 and The Clancy in November 2025.

During the 2026 quarter, our 13 comparable hotel properties experienced a 5.8% increase in room rates while occupancy was flat compared to the 2025 quarter.

Rooms revenue decreased $7.6 million, or 7.0%, to $102.2 million during the 2026 quarter compared to the 2025 quarter primarily due to the sales of Marriott Seattle Waterfront in August 2025, The Clancy in November 2025 and the Park Hyatt Beaver Creek Resort & Spa in May 2026.

During the 2026 quarter, our 12 comparable hotel properties experienced a 49 basis point decrease in occupancy and a 12.9% increase in room rates.

Fluctuations in rooms revenue between the 2026 quarter and the 2025 quarter are a result of the changes in occupancy and ADR between the 2026 quarter and the 2025 quarter as reflected in the table below (dollars in thousands):

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Rooms Revenue Occupancy

(change in bps) ADR (change in %)

Capital Hilton $ 342 (19) 2.9 %

The Notary Hotel 1,076 (205) 15.7 %

Sofitel Chicago Magnificent Mile 903 82 9.5 %

Pier House Resort & Spa 629 836 (0.4) %

The Ritz-Carlton St.

Thomas 2,092 469 12.3 %

Hotel Yountville 522 188 14.4 %

The Ritz-Carlton Sarasota 1,728 708 7.4 %

Bardessono Hotel and Spa 211 (505) 12.9 %

The Ritz-Carlton Lake Tahoe (499) (1,388) 21.7 %

Cameo Beverly Hills 936 (365) 45.4 %

The Ritz-Carlton Reserve Dorado Beach 3,271 903 11.6 %

Four Seasons Resort Scottsdale (344) (1,111) 17.3 %

Total $ 10,867 (49) 12.9 %

Noncomparable

Park Hyatt Beaver Creek Resort & Spa (718) 36 (16.5) %

Marriott Seattle Waterfront (8,911) n/a n/a

The Clancy (8,879) n/a n/a

Food and Beverage Revenue .

Food and beverage revenue decreased $249,000, or 0.5%, to $45.3 million during the 2026 quarter compared to the 2025 quarter.

This decrease is attributable to an aggregate decrease of $3.2 million at Sofitel Chicago Magnificent Mile, Hotel Yountville, The Ritz-Carlton Lake Tahoe, Bardessono Hotel and Spa and Four Seasons Resort Scottsdale and a decrease of $2.9 million due to the sales of Marriott Seattle Waterfront, The Clancy and Park Hyatt Beaver Creek Resort & Spa.

These decreases were partially offset by an aggregate increase of $5.8 million at seven 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 $161,000, or 0.7%, to $23.5 million during the 2026 quarter compared to the 2025 quarter.

This decrease is attributable to a decrease of $2.5 million due to the sales of Marriott Seattle Waterfront, The Clancy and Park Hyatt Beaver Creek Resort & Spa and an aggregate decrease of $217,000 at Capital Hilton, Sofitel Chicago Magnificent Mile, The Ritz-Carlton Lake Tahoe and Cameo Beverly Hills, partially offset by an aggregate increase of $2.5 million at eight comparable hotel properties.

Rooms Expense .

Rooms expense decreased $3.1 million, or 11.2%, to $24.2 million in the 2026 quarter compared to the 2025 quarter.

This decrease is primarily attributable to an aggregate decrease of $5.0 million due to the sales of Marriott Seattle Waterfront, The Clancy and Park Hyatt Beaver Creek Resort & Spa and an aggregate decrease of $208,000 at Capital Hilton, Bardessono Hotel and Spa, The Ritz-Carlton Lake Tahoe and Four Seasons Resort Scottsdale.

These decreases are partially offset by an aggregate increase of $2.1 million at eight comparable hotel properties.

Food and Beverage Expense .

Food and beverage expense decreased $870,000, or 2.4%, to $34.9 million during the 2026 quarter compared to the 2025 quarter.

This decrease is attributable to an aggregate decrease of $802,000 at Sofitel Chicago Magnificent Mile, Pier House Resort & Spa, The Ritz-Carlton Lake Tahoe and Four Seasons Resort Scottsdale and a decrease of $3.2 million from the three disposed hotel properties, partially offset by an aggregate increase of $3.1 million at eight comparable hotel properties.

Other Operating Expenses .

Other operating expenses decreased $3.5 million, or 6.2%, to $52.9 million in the 2026 quarter compared to the 2025 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 a decrease of $3.3 million in indirect expenses and incentive management fees and a decrease of $222,000 in direct expenses in the 2026 quarter as compared to the 2025 quarter.

Direct expenses were 4.7% of total hotel revenue in the 2026 quarter and 4.6% in the 2025 quarter.

The decrease in direct expenses is associated with lower direct expenses of $565,000 due to the sales of Marriott Seattle Waterfront, The Clancy and Park Hyatt Beaver Creek Resort & Spa partially offset by higher direct expenses of $343,000 at our 12 comparable hotel properties.

The decrease in indirect expenses comprises decreases in:

(i) general and administrative costs of $2.2 million comprising an aggregate decrease of $3.0 million from the three disposed hotel properties, partially offset by an aggregate increase of $874,000 at our 12 comparable hotel properties;

(ii) marketing costs of $1.4 million comprising a decrease of $1.9 million from the three disposed hotel properties partially offset by an aggregate increase of $510,000 at our 12 comparable hotel properties;

(iii) repairs and maintenance of $974,000 comprising a decrease of $1.1 million from the three disposed hotel properties partially offset by an aggregate increase of $121,000 at our 12 comparable hotel properties;

and (iv) energy costs of $220,000 comprising a decrease of $582,000 from the three disposed hotel properties partially offset by an aggregate increase of $362,000 at our 12 comparable hotel properties.

These increases were partially offset by increases in incentive management fees of $1.4 million comprising an aggregate increase of $1.2 million at our 12 comparable hotel properties and an increase of $253,000 from the three disposed hotel properties.

Management Fees .

Base management fees decreased $403,000, or 7.3%, to $5.1 million in the 2026 quarter compared to the 2025 quarter.

Base management fees decreased $131,000 at The Ritz-Carlton Lake Tahoe and Four Seasons Resort Scottsdale and $932,000 from the three disposed hotel properties.

These decreases were partially offset by an aggregate increase of $659,000 at ten comparable hotel properties.

Property Taxes, Insurance and Other .

Property taxes, insurance and other decreased $385,000, or 4.9%, to $7.5 million in the 2026 quarter compared to the 2025 quarter.

The decrease is primarily attributable to an aggregate decrease of approximately $281,000 at eleven comparable hotel properties and a decrease of $1.6 million from the three disposed hotel properties.

These decreases were partially offset by an aggregate increase of approximately $1.5 million at the Sofitel Chicago Magnificent Mile.

Depreciation and Amortization .

Depreciation and amortization decreased $1.9 million, or 8.2%, to $21.4 million in the 2026 quarter compared to the 2025 quarter.

There was an aggregate decrease of $306,000 at Capital Hilton, The Notary Hotel, Pier House Resort & Spa and The Ritz-Carlton Sarasota and a decrease of $3.6 million from the three disposed hotel properties, partially offset by an aggregate increase of $2.0 million at eight comparable hotel properties.

Advisory Services Fee.

Advisory services fee increased $89,000, or 1.2%, to $7.3 million in the 2026 quarter compared to the 2025 quarter due to increases of $312,000 in the base advisory fee and $51,000 in equity-based compensation partially offset by decreases of $188,000 in the incentive fee and $86,000 in reimbursable expenses.

In the 2026 quarter, we recorded an advisory services fee of $7.3 million, which included a base advisory fee of $3.8 million and reimbursable expenses of $3.5 million.

In the 2025 quarter, we recorded an advisory services fee of $7.2 million, which included a base advisory fee of $3.5 million, reimbursable expenses of $3.6 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.

Corporate General and Administrative .

Corporate general and administrative expense was $4.4 million in the 2026 quarter and consisted of $2.6 million in professional fees, $1.4 million of public company costs and $410,000 of miscellaneous expenses.

Corporate general and administrative expense was a credit to expense of $2.3 million in the 2025 quarter and consisted of $1.6 million in professional fees, $5.0 million of reimbursed legal costs, $122,000 in miscellaneous expenses and $936,000 in public company costs.

Gain (loss) on disposition of assets and hotel property .

In the 2026 quarter, we recorded a gain of approximately $17.4 million related to the sale of the Park Hyatt Beaver Creek Resort & Spa.

Interest Income .

Interest income was $774,000 and $1.5 million in the 2026 quarter and 2025 quarter, respectively.

The decrease in interest income in the 2026 quarter was primarily attributable to lower interest rates and lower excess cash balances in the 2026 quarter compared to the 2025 quarter.

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 Expense and Amortization of Loan Costs .

Interest expense and amortization of loan costs decreased $4.8 million, or 19.1%, to $20.5 million in the 2026 quarter compared to the 2025 quarter.

This decrease is primarily due to lower interest expense of $4.6 million and lower amortization costs of $246,000 from lower average interest rates and lower loan balances.

Write-off of Loan Costs and Exit Fees.

Write-off of loan costs and exit fees was $1.5 million in the 2026 quarter due to The Ritz-Carlton Lake Tahoe loan extension.

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

Realized and Unrealized Gain (Loss) on Derivatives .

Realized and unrealized gain on derivatives of $35,000 for the 2026 quarter consisted primarily of an unrealized gain on interest rate caps.

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.

Income Tax (Expense) Benefit .

Income tax (expense) benefit changed $2.8 million, from a benefit of $345,000 in the 2025 quarter to expense of $2.5 million in the 2026 quarter.

This change was primarily due to an increase in the taxable income of certain of our TRS entities in the 2026 quarter compared to the 2025 quarter.

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

Our noncontrolling interest partners in consolidated entities were allocated a loss of $48,000 and income of $115,000 in the 2026 quarter and the 2025 quarter, respectively.

At June 30, 2026, noncontrolling interest in consolidated entities represented an ownership interest of 25% ownership interest in a JV.

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.

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

Noncontrolling interests in operating partnership were allocated a net loss of $48,000 and $1.5 million in the 2026 quarter and the 2025 quarter, respectively.

Redeemable noncontrolling interests in Braemar OP represented ownership interests of 6.27% and 8.51% as of June 30, 2026 and 2025, respectively.

Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025

The following table summarizes changes in key line items from our condensed consolidated statements of operations for the six months ended June 30, 2026 and 2025 (in thousands except percentages):

Six Months Ended June 30, Favorable (Unfavorable)

2026 2025 $ Change % Change

Rooms $ 230,984 $ 245,916 $ (14,932) (6.1) %

Food and beverage 97,664 97,359 305 0.3

Other 51,361 51,622 (261) (0.5)

Total hotel revenue 380,009 394,897 (14,888) (3.8)

Hotel operating expenses:

Rooms 49,096 55,504 6,408 11.5

Food and beverage 73,807 75,977 2,170 2.9

Other expenses 112,802 116,821 4,019 3.4

Management fees 11,332 12,451 1,119 9.0

Total hotel operating expenses 247,037 260,753 13,716 5.3

Property taxes, insurance and other 12,159 18,357 6,198 33.8

Depreciation and amortization 44,012 46,755 2,743 5.9

Advisory services fee 14,684 13,802 (882) (6.4)

Corporate general and administrative 9,280 596 (8,684) (1,457.0)

Total expenses 327,172 340,263 13,091 3.8

Gain (loss) on disposition of assets and hotel property 17,398 — 17,398

Operating income (loss) 70,235 54,634 15,601 28.6

Equity in earnings (loss) of unconsolidated entity (31) — (31)

Interest income 1,584 3,407 (1,823) (53.5)

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

Interest expense and amortization of discounts and loan costs (41,708) (50,188) 8,480 16.9

Write-off of loan costs and exit fees (1,489) (1,467) (22) 1.5

Realized and unrealized gain (loss) on derivatives 283 (183) 466 254.6

Income (loss) before income taxes 28,874 4,953 23,921 483.0

Income tax (expense) benefit (3,898) (1,122) (2,776) (247.4)

Net income (loss) 24,976 3,831 21,145 551.9

(Income) loss attributable to noncontrolling interest in consolidated entities 65 (51) 116 227.5

Net (income) loss attributable to redeemable noncontrolling interests in operating partnership (299) 1,751 (2,050) (117.1)

Net income (loss) attributable to the Company $ 24,742 $ 5,531 $ 19,211 347.3 %

All hotel properties owned for the six months ended June 30, 2026 and 2025 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, 2026 and 2025.

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

The following dispositions affect reporting comparability related to our condensed consolidated financial statements:

Hotel Property Location Type Date

Marriott Seattle Waterfront

Seattle, Washington

August 7, 2025

San Francisco, California

November 6, 2025

Park Hyatt Beaver Creek Resort & Spa Avon, Colorado

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, 2026 and 2025:

Six Months Ended June 30,

Occupancy 67.65 % 68.23 %

ADR (average daily rate) $ 626.48 $ 519.90

RevPAR (revenue per available room) $ 423.79 $ 354.74

Rooms revenue (in thousands) $ 230,984 $ 245,916

Total hotel revenue (in thousands) $ 380,009 $ 394,897

The following table illustrates the key performance indicators of the 12 comparable hotel properties that were owned for the full six months ended June 30, 2026 and 2025:

Six Months Ended June 30,

Occupancy 68.18 % 68.31 %

ADR (average daily rate) $ 616.07 $ 561.80

RevPAR (revenue per available room) $ 420.04 $ 383.74

Rooms revenue (in thousands) $ 217,184 $ 198,506

Total hotel revenue (in thousands) $ 355,506 $ 328,323

Net Income (Loss) Attributable to the Company.

Net income attributable to the Company increased $19.2 million from $5.5 million for the six months ended June 30, 2025 (the “2025 period”) to $24.7 million for the six months ended June 30, 2026 (the “2026 period”), as a result of the factors discussed below.

Rooms Revenue .

Rooms revenue decreased $14.9 million to $231.0 million during the 2026 period compared to the 2025 period primarily due to the sales of Marriott Seattle Waterfront in August 2025, The Clancy in November 2025 and Park Hyatt Beaver Creek Resort & Spa in May 2026.

During the 2026 period, our 12 comparable hotel properties experienced a 9.7% increase in room rates and a 13 basis point decrease in occupancy compared to the 2025 period.

Fluctuations in rooms revenue between the 2026 period and the 2025 period are a result of the changes in occupancy and ADR between the 2026 period and the 2025 period as reflected in the table below (dollars in thousands):

Hotel Property Favorable (Unfavorable)

Rooms Revenue Occupancy

(change in bps) ADR

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4,441 448 9.7 %

Park Hyatt Beaver Creek Resort & Spa

(775) (385) (0.8) %

Hotel Yountville 469 109 8.3 %

(53) 29 (4.4) %

The Ritz-Carlton Sarasota

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Total $ 18,676 (13) 9.7 %

Non-comparable

Noncomparable

Park Hyatt Beaver Creek Resort & Spa $ (1,493) 428 4.3 %

Marriott Seattle Waterfront $ (18,655) n/a n/a

$ (13,460) n/a n/a

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

Food and Beverage Revenue .

Food and beverage revenue increased $554,000, or 1.1%, to $52.3 million during the 2026 quarter compared to the 2025 quarter.

We experienced an aggregate increase in food and beverage revenue of approximately

$3.3 million at ten comparable hotel properties.

This increase was partially offset by an aggregate decrease of $885,000 at The Notary Hotel, The Ritz-Carlton Lake Tahoe and Four Seasons Resort Scottsdale and a decrease of $1.9 million due to the sales of The Clancy and Marriott Seattle Waterfront.

Food and beverage revenue increased $305,000, or 0.3%, to $97.7 million during the 2026 period compared to the 2025 period.

We experienced an aggregate increase in food and beverage revenue of approximately $8.5 million at seven comparable hotel properties.

This increase was partially offset by an aggregate decrease of $3.6 million at Sofitel Chicago Magnificent Mile, Hotel Yountville, Bardessono Hotel and Spa, The Ritz-Carlton Lake Tahoe, and Four Seasons Resort Scottsdale and a decrease of $4.6 million due to the sales of the Marriott Seattle Waterfront, The Clancy and Park Hyatt Beaver Creek Resort & Spa.

Other Hotel Revenue .

Other hotel revenue, which consists mainly of condominium management fees, health center fees, resort fees, golf, telecommunications, parking and rentals, decreased $100,000, or 0.4%, to $27.8 million during the 2026 quarter compared to the 2025 quarter.

This decrease is attributable to an aggregate decrease of approximately $587,000 at the Capital Hilton, Sofitel Chicago Magnificent Mile and Cameo Beverly Hills as well as a decrease of $1.4 million due to the sales of The Clancy and Marriott Seattle Waterfront.

These decreases were partially offset by higher other hotel revenue of $1.9 million at ten comparable hotel properties.

Other hotel revenue, which consists mainly of condominium management fees, health center fees, resort fees, golf, telecommunications, parking and rentals, decreased $261,000, or 0.5%, to $51.4 million during the 2026 period compared to the 2025 period.

This decrease is attributable to an aggregate decrease of approximately $705,000 at the Capital Hilton, Sofitel Chicago Magnificent Mile and Cameo Beverly Hills as well as a decrease of $3.9 million due to the sales of the Marriott Seattle Waterfront, The Clancy and Park Hyatt Beaver Creek Resort & Spa.

These decreases were partially offset by higher other hotel revenue of $4.3 million at nine comparable hotel properties.

Rooms Expense .

Rooms expense decreased $3.3 million, or 11.8%, to $24.9 million in the 2026 quarter compared to the 2025 quarter.

This decrease is attributable to an aggregate decrease in rooms expense of $462,000 at Capital Hilton, Pier House Resort & Spa, Park Hyatt Beaver Creek Resort & Spa and The Ritz-Carlton Lake Tahoe and a decrease of $4.0 million due to the sales of The Clancy and Marriott Seattle Waterfront.

These decreases were partially offset by an aggregate increase of $1.1 million at nine comparable hotel properties.

Rooms expense decreased $6.4 million, or 11.5%, to $49.1 million in the 2026 period compared to the 2025 period.

This decrease is attributable to an aggregate decrease in rooms expense of $411,000 at Capital Hilton, Pier House Resort & Spa, Bardessono Hotel and Spa and The Ritz-Carlton Lake Tahoe and a decrease of $9.2 million due to the sales of the Marriott Seattle Waterfront, The Clancy and Park Hyatt Beaver Creek Resort & Spa.

These decreases were partially offset by an aggregate increase of $3.2 million at eight comparable hotel properties.

Food and Beverage Expense .

Food and beverage expense decreased $1.3 million, or 3.2%, to $38.9 million during the 2026 quarter compared to the 2025 quarter.

This decrease is attributable to lower aggregate food and beverage expense of approximately $533,000 at the Pier House Resort & Spa, Bardessono Hotel and Spa and The Ritz-Carlton Lake Tahoe and a decrease of $2.2 million due to the sales of The Clancy and Marriott Seattle Waterfront.

These decreases were partially offset by an aggregate increase of approximately $1.5 million at ten comparable hotel properties.

Food and beverage expense decreased $2.2 million, or 2.9%, to $73.8 million during the 2026 period compared to the 2025 period.

This decrease is attributable to lower aggregate food and beverage expense of approximately $1.2 million at the Sofitel Chicago Magnificent Mile, Pier House Resort & Spa, Bardessono Hotel and Spa, The Ritz-Carlton Lake Tahoe and Four Seasons Resort Scottsdale and a decrease of $5.2 million due to the sales of the Marriott Seattle Waterfront, The Clancy and Park Hyatt Beaver Creek Resort & Spa.

These decreases were partially offset by an aggregate increase of approximately $4.3 million at seven comparable hotel properties.

Other Operating Expenses .

Other operating expenses decreased $498,000, or 0.8%, to $59.9 million in the 2026 quarter compared to the 2025 quarter.

Other operating expenses decreased $4.0 million, or 3.4%, to $112.8 million in the 2026 period compared to the 2025 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 an increase of $552,000 in direct expenses and a decrease of $1.1 million in indirect expenses and incentive management fees in the 2026 quarter compared to the 2025 quarter.

Direct expenses were 4.8% of total hotel revenue in the 2026 quarter and 4.4% in the 2025 quarter.

The increase in direct expenses is associated with higher direct expenses of $684,000 at our 13 comparable hotel properties partially offset by a decrease of $132,000 due to the sales of The Clancy and Marriott Seattle Waterfront.

We experienced an increase of $330,000 in direct expenses and a decrease of $4.3 million in indirect expenses and incentive management fees in the 2026 period compared to the 2025 period.

Direct expenses were 4.7% of total hotel revenue in the 2026 period and 4.5% in the 2025 period.

The increase in direct expenses is associated with higher direct expenses of $951,000 at our 12 comparable hotel properties partially offset by a decrease of $621,000 due to the sales of Marriott Seattle Waterfront, The Clancy and Park Hyatt Beaver Creek Resort & Spa.

The decrease in indirect expenses is comprised of decreases in:

(i) general and administrative costs of $786,000 comprising a decrease of $2.0 million from the two disposed hotel properties partially offset by an aggregate increase of $1.2 million at our 13 comparable hotel properties;

(ii) marketing costs of $748,000 comprising an aggregate decrease of $1.2 million from the two disposed hotel properties partially offset by an increase of $497,000 at our 13 comparable hotel properties;

and (iii) repairs and maintenance of $986,000 comprising an aggregate decrease of $117,000 at our 13 comparable hotel properties and a decrease of $869,000 from the two disposed hotel properties.

(i) general and administrative costs of $2.7 million comprising a decrease of $4.9 million from the three disposed hotel properties partially offset by an aggregate increase of $2.1 million at our 12 comparable hotel properties;

(ii) marketing costs of $2.1 million comprising an aggregate decrease of $3.1 million from the three disposed hotel properties partially offset by an increase of $1.0 million at our 12 comparable hotel properties;

and (iii) repairs and maintenance of $2.0 million comprising a decrease of $2.0 million from the three disposed hotel properties partially offset by an aggregate increase of $38,000 at our 12 comparable hotel properties.

These decreases were partially offset by increases in:

(i) incentive management fees of $913,000 at our 13 comparable hotel properties;

and (ii) energy costs of $570,000 comprising an aggregate increase of $984,000 at our 13 comparable hotel properties partially offset by a decrease of $414,000 from the two disposed hotel properties.

(i) incentive management fees of $2.3 million at our 12 comparable hotel properties and an increase of $267,000 from the three disposed hotel properties;

and (ii) energy costs of $350,000 comprising an aggregate increase of $1.3 million at our 12 comparable hotel properties partially offset by a decrease of $984,000 from the three disposed hotel properties.

Management Fees .

Base management fees decreased $716,000, or 10.4%, to $6.2 million in the 2026 quarter compared to the 2025 quarter.

Management fees decreased $754,000 due to the sales of The Clancy and Marriott Seattle Waterfront, and decreases of $233,000 at The Ritz-Carlton Sarasota, Cameo Beverly Hills, Capital Hilton and Park Hyatt Beaver Creek Resort & Spa.

These decreases were partially offset by an aggregate increase of $271,000 at nine comparable hotel properties.

Base management fees decreased $1.1 million, or 9.0%, to $11.3 million in the 2026 period compared to the 2025 period.

Management fees decreased $1.7 million due to the sales of the Marriott Seattle Waterfront, The Clancy and Park Hyatt Beaver Creek Resort & Spa as well as decreases of $112,000 at Capital Hilton and The Ritz-Carlton Lake Tahoe.

These decreases were partially offset by an aggregate increase of $700,000 at ten comparable hotel properties.

Property Taxes, Insurance and Other .

Property taxes, insurance and other decreased $5.8 million, or 55.5%, to $4.7 million in the 2026 quarter compared to the 2025 quarter.

This decrease is primarily attributable to a decrease of $1.6 million due to the sales of The Clancy and Marriott Seattle Waterfront and an aggregate decrease of $4.2 million at our 13 comparable hotel properties, primarily attributable to a favorable property tax assessment at the Sofitel Chicago Magnificent Mile.

Property taxes, insurance and other decreased $6.2 million, or 33.8%, to $12.2 million in the 2026 period compared to the 2025 period.

This decrease is primarily attributable to a decrease of $3.1 million due to the sales of the Marriott Seattle Waterfront, The Clancy and Park Hyatt Beaver Creek Resort & Spa and an aggregate decrease of $3.0 million at our 12 comparable hotel properties, primarily attributable to a favorable property tax assessment at the Sofitel Chicago Magnificent Mile.

Depreciation and Amortization .

Depreciation and amortization decreased $816,000, or 3.5%, to $22.6 million for the 2026 quarter compared to the 2025 quarter.

This decrease is due to lower depreciation of $3.4 million from the sales of The Clancy and Marriott Seattle Waterfront and an aggregate decrease of $324,000 at Capital Hilton, Sofitel Chicago Magnificent Mile and Pier House Resort & Spa.

These decreases were partially offset by an aggregate increase of $2.9 million at ten comparable hotel properties.

Depreciation and amortization decreased $2.7 million, or 5.9%, to $44.0 million for the 2026 period compared to the 2025 period.

This decrease is due to lower depreciation of $6.3 million from the sales of the Marriott Seattle Waterfront, The Clancy and Park Hyatt Beaver Creek Resort & Spa and an aggregate decrease of $475,000 at Capital Hilton, Pier House Resort & Spa and Sofitel Chicago Magnificent Mile.

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

Advisory Services Fee.

Advisory services fee increased $793,000, or 12.0%, to $7.4 million in the 2026 quarter compared to the 2025 quarter due to higher reimbursable expenses of $635,000, higher base advisory fee of $192,000 and higher equity-based compensation of $48,000, partially offset by a lower incentive fee of $82,000.

In the 2026 quarter, we recorded an advisory services fee of $7.4 million, which included a base advisory fee of $3.8 million and reimbursable expenses of $3.6 million.

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.

Advisory services fee increased $882,000, or 6.4%, to $14.7 million in the 2026 period compared to the 2025 period due to higher reimbursable expenses of $549,000, higher base advisory fee of $504,000 and higher equity-based compensation of $99,000, partially offset by a lower incentive fee of $270,000.

In the 2026 period, we recorded an advisory services fee of $14.7 million, which included a base advisory fee of $7.6 million and reimbursable expenses of $7.1 million.

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.

Corporate General and Administrative .

Corporate general and administrative expense was $4.9 million in the 2026 quarter and consisted of $3.5 million in professional fees, $709,000 of public company costs, $437,000 related to Ashford Securities and $270,000 in miscellaneous expenses.

Corporate general and administrative expense was $2.9 million in the 2025 quarter and consisted of $1.5 million in professional fees, $673,000 of public company costs and $717,000 in miscellaneous expenses.

Corporate general and administrative expense was $9.3 million in the 2026 period and consisted of $6.1 million in professional fees, $2.1 million of public company costs, $435,000 related to Ashford Securities and $682,000 in miscellaneous expenses.

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.

Gain (loss) on disposition of assets and hotel property .

In the 2026 period we recorded a gain of approximately $17.4 million related to the sale of the Park Hyatt Beaver Creek Resort & Spa.

Equity in Earnings (Loss) of Unconsolidated Entity .

There was a $31,000 loss in equity in earnings (loss) of unconsolidated entity in the 2026 quarter as a result of writing off the remaining OpenKey note receivable balance.

There was a $31,000 loss in equity in earnings (loss) of unconsolidated entity in the 2026 period as a result of writing off the remaining OpenKey note receivable balance.

Other Income (Expense).

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

Interest Income .

Interest income was $810,000 and $1.9 million in the 2026 quarter and the 2025 quarter, respectively.

The decrease in interest income in the 2026 quarter was primarily attributable to lower interest rates and lower excess cash balances compared to the 2025 quarter.

Interest income was $1.6 million and $3.4 million in the 2026 period and the 2025 period, respectively.

The decrease in interest income in the 2026 period was primarily attributable to lower interest rates and lower excess cash balances compared to the 2025 period.

Interest Expense and Amortization of Discounts and Loan Costs .

Interest expense and amortization of discounts and loan costs decreased $3.6 million, or 14.6%, to $21.2 million for the 2026 quarter compared to the 2025 quarter.

The decrease is primarily due to lower interest expense of $3.9 million from lower average interest rates and lower average debt balances in the 2026 quarter partially offset by higher amortization of loan costs of approximately $277,000 in the 2026 quarter compared to the 2025 quarter.

Interest expense and amortization of discounts and loan costs decreased $8.5 million, or 16.9%, to $41.7 million for the 2026 period compared to the 2025 period.

The decrease is primarily due to lower interest expense of $8.5 million from lower average interest rates and lower average debt balances in the 2026 period partially offset by higher amortization of loan costs of approximately $31,000 in the 2026 period compared to the 2025 period.

Write-off of Loan Costs and Exit Fees.

Write-off of loan costs and exit fees was $5,000 in the 2026 quarter.

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 $1.5 million in the 2026 period related to The Ritz-Carlton Lake Tahoe loan extension.

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

Realized and Unrealized Gain (Loss) on Derivatives .

Realized and unrealized gain on derivatives of $248,000 for the 2026 quarter consisted of an unrealized gain on interest rate caps of $240,000 and a realized gain of $8,000 associated with payments received from counterparties on in-the-money interest rate caps.

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 $283,000 for the 2026 period consisted of an unrealized gain on interest rate caps of $273,000 and a realized gain of $10,000 associated with payments received from counterparties on in-the-money interest rate caps.

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.

Income Tax (Expense) Benefit .

Income tax expense decreased $50,000, from $1.5 million in the 2025 quarter to $1.4 million in the 2026 quarter.

Income tax expense increased $2.8 million, from $1.1 million in the 2025 period to $3.9 million in the 2026 period.

This change was primarily due to an increase in the taxable income of certain of our TRS entities in the 2026 period compared to the 2025 period.

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

Our noncontrolling interest partners in consolidated entities were allocated a loss of $17,000 and a loss of $64,000 in the 2026 quarter and the 2025 quarter, respectively.

For the 2026 quarter noncontrolling interest in consolidated entities represented a 25% ownership interest in a JV.

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

Our noncontrolling interest partners in consolidated entities were allocated a loss of $65,000 and income of $51,000 in the 2026 period and the 2025 period, respectively.

For the 2026 period noncontrolling interest in consolidated entities represented a 25% ownership interest in a JV.

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.

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

Noncontrolling interests in operating partnership were allocated net income of $347,000 in the 2026 quarter and a net loss of $262,000 in the 2025 quarter.

Redeemable noncontrolling interests represented ownership interests in Braemar OP of approximately 6.61% and 9.33% as of March 31, 2026 and 2025, respectively.

Noncontrolling interests in operating partnership were allocated net income of $299,000 in the 2026 period and a net loss of $1.8 million in the 2025 period.

Redeemable noncontrolling interests represented ownership interests in Braemar OP of approximately 6.27% and 8.51% as of June 30, 2026 and 2025, respectively.

LIQUIDITY AND CAPITAL RESOURCES

Our short-term liquidity requirements consist primarily of funds necessary to pay for operating expenses and other expenditures directly associated with our hotel properties, including:

• advisory fees payable to Ashford LLC;

• advisory fees, including the Company Sale Fee, payable to Ashford LLC;

• recurring maintenance necessary to maintain our hotel properties in accordance with brand standards;

10 unchanged sentences

Thus, even if our total market capitalization and performance decline, we will still be required to make payments to our Advisor equal to the minimum base advisory fee, which could adversely impact our liquidity and financial condition.

Additionally, under the terms of the Amended Side Letter agreed

with our Advisor in December 2025, we are required to remit property sale net proceeds, after taking into account our anticipated working capital requirements, to our Advisor to satisfy the Company Sale Fee and Master Agreements Termination Fee, once triggered.

Our long-term liquidity requirements consist primarily of funds necessary to pay for the costs of acquiring additional hotel properties and redevelopments, renovations, expansions and other capital expenditures that need to be made periodically with respect to our hotel properties and scheduled debt payments.

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Our loans that are in cash traps 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, 2026, the mortgage loan secured by The Ritz-Carlton Lake Tahoe and the loan secured by the Capital Hilton were in cash traps.

The amount of cash in the cash traps as of March 31, 2026 was $0.

As of March 31, 2026, the Company held cash and cash equivalents of $93.4 million and restricted cash of $55.4 million, the vast majority of which is comprised of lender and manager-held reserves.

As of March 31, 2026, $28.1 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, 2026, our net debt to gross assets was 46.8%.

As of June 30, 2026, the mortgage loan secured by The Ritz-Carlton Lake Tahoe and the loan secured by the Capital Hilton were in cash traps.

The amount of cash in the cash traps as of June 30, 2026 was $0.

As of June 30, 2026, the Company held cash and cash equivalents of $98.2 million (inclusive of amounts held for sale) and restricted cash of $52.6 million, the vast majority of which is comprised of lender and manager-held reserves.

As of June 30, 2026, $19.4 million (inclusive of amounts held for sale) 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, 2026, our net debt to gross assets was 43.5%.

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

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Each share of our Series E Preferred Stock and Series M Preferred Stock is redeemable at any time, at the option of the holder, at a redemption price of $25.00 per share, plus any accumulated, accrued and unpaid dividends, less a redemption fee, subject to the limitations as stated in the Articles Supplementary.

As of March 31, 2026, the Company determined that a portion of the outstanding Series E Preferred Stock and Series M Preferred Stock met the criteria for mandatory redemption based on certain holders initiating redemption requests that exceeded the limitations set forth in the Articles Supplementary.

As of March 31, 2026, the Company has received $45.7 million in investor-initiated Series E Preferred Stock redemption requests and $1.0 million in investor-initiated Series M Preferred Stock redemption requests that have not been completed and are included in “redeemable preferred stock redemptions payable” in our condensed consolidated balance sheet.

Based on the various limitations in place as of March 31, 2026, and not considering any future redemption requests received, we expect that all of these redemption requests will be fulfilled over the subsequent twelve months from March 31, 2026.

As of April 30, 2026, the redeemable preferred stock redemptions payable was approximately $49.7 million.

Potential Strategic Transaction

As previously disclosed, our board of directors is exploring potential strategic alternatives, including a potential sale of the Company or one or more potential transactions involving the sale of individual assets.

However, there can be no assurance that the strategic process will result in a transaction of any kind.

The outcome of the process will depend on many factors beyond our control, including the availability of interested buyers for the Company as a whole or for individual assets, the state of the capital markets, macroeconomic and industry conditions, and the ability to negotiate mutually acceptable terms.

The failure to complete a transaction, or uncertainty about whether or when a transaction may be completed, could negatively affect investor sentiment, cause volatility in our stock price, and adversely affect our business, operating results, liquidity, and financial condition.

We can give no assurance that the strategic process will result in a definitive agreement or a completed transaction, whether involving the entire Company or individual assets, on terms favorable to stockholders, or at all.

As of June 30, 2026, the Company determined that a portion of the outstanding Series E Preferred Stock and Series M Preferred Stock met the criteria for mandatory redemption based on certain holders initiating redemption requests that exceeded the limitations set forth in the Articles Supplementary.

As of June 30, 2026, the Company has received $53.4 million in investor-initiated Series E Preferred Stock redemption requests and $1.3 million in investor-initiated Series M Preferred Stock redemption requests that have not been completed and are included in “redeemable preferred stock redemptions payable” in our condensed consolidated balance sheet.

Based on the various limitations in place as of June 30, 2026, and not considering any future redemption requests received, we expect that all of these redemption requests will be fulfilled over the subsequent twelve months from June 30, 2026.

As of July 31, 2026, the redeemable preferred stock redemptions payable was approximately $57.8 million.

Equity Transactions

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5 to the Third Amended and Restated Agreement of Limited Partnership to amend the terms of its operating partnership agreement to conform to the terms of the Series E Articles Supplementary and Series M Articles Supplementary.

In total, the Company issued approximately 16.4 million shares of Series E Preferred Stock and received net proceeds of approximately $369.5 million and issued approximately 2.0 million shares of Series M Preferred

Stock and received net proceeds of approximately $47.6 million.

On February 21, 2023, the Company announced the closing of its offering of the Series E Preferred Stock and Series M Preferred Stock.

3 unchanged sentences

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

As of May 5, 2026, the Company has not repurchased any common stock pursuant to the plan.

As of August 4, 2026, the Company has not repurchased any common stock pursuant to the plan.

Debt Transactions

On May 26, 2026, the Company sold the Park Hyatt Beaver Creek Resort & Spa for $176 million in cash, subject to customary pro-rations and adjustments.

Additionally, the Company repaid the $70.5 million mortgage loan that was secured by the hotel property.

On June 1, 2026 the Company repaid its $86.3 million Convertible Senior Notes in full.

On June 25, 2026 the Company extended its $43.4 million mortgage loan secured by The Ritz-Carlton Lake Tahoe.

The loan had an initial maturity date of July 15, 2026 and now has a maturity date of October 15, 2026.

An additional three-month maturity extension is also available at the Company’s discretion on the same terms.

Additionally, the Company repaid approximately $232.8 million on the mortgage loan that was partially secured by the hotel properties.

Sources and Uses of Cash

We had approximately $93.4 million and $124.4 million of cash and cash equivalents at March 31, 2026 and December 31, 2025, respectively.

We had approximately $98.2 million (inclusive of amounts held for sale) and $124.4 million of cash and cash equivalents at June 30, 2026 and December 31, 2025, 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 $21.9 million and $15.1 million for the three months ended March 31, 2026 and 2025, respectively.

Net cash flows provided by operating activities were $42.9 million and $38.2 million for the six months ended June 30, 2026 and 2025, respectively.

Cash flows from operations were impacted by changes in hotel operations and the disposition of hotel properties.

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

For the three months ended March 31, 2026, net cash flows used in investing activities were $11.9 million.

The cash outflows of $12.1 million consisted of capital improvements made to various hotel properties.

These cash outflows were partially offset by cash inflows of $135,000 from property insurance proceeds and $58,000 from the sale of OpenKey.

For the six months ended June 30, 2026, net cash flows provided by investing activities were $152.2 million.

Cash inflows consisted of net proceeds from the sale of the Park Hyatt Beaver Creek Resort & Spa of $169.2 million, $716,000 from property insurance proceeds and $58,000 from the sale of OpenKey.

These cash inflows were partially offset by cash outflows of $17.8 million from capital improvements made to various hotel properties.

Our capital improvements consisted of approximately $12.8 million of return on investment capital projects and approximately $5.0 million of renewal and replacement capital projects.

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.

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.

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

For the three months ended March 31, 2026, net cash flows used in financing activities were $28.2 million.

Cash outflows primarily consisted of $17.0 million for cash redemptions of Series E and Series M Preferred Stock and $11.1 million of dividend and distribution payments.

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

For the six months ended June 30, 2026, net cash flows used in financing activities were $210.0 million.

Cash outflows primarily consisted of $156.8 million of repayments of indebtedness, $1.6 million of payments of loan costs and exit fees, $33.3 million for cash redemptions of Series E and Series M Preferred Stock and $18.4 million of dividend and distribution payments.

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, and $244,000 of proceeds from in-the-money interest rate caps.

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.

Dividend Policy

Our board of directors has not declared a dividend policy for 2026 in light of the fact that there is an ongoing Company strategic review process.

Our board of directors has not declared a dividend policy for 2026.

The board of directors will continue to review the Company’s dividend policy.

2 unchanged sentences

This seasonality pattern can cause fluctuations in our quarterly lease revenue under our percentage leases.

conditions, natural disasters, terrorist attacks or alerts, civil unrest, government shutdowns, airline strikes or reduced airline capacity, economic factors and other considerations affecting travel.

Quarterly revenue also may be adversely affected by renovations and repositionings, our managers’ effectiveness in generating business and by events beyond our control, such as pandemics, extreme weather conditions, natural disasters, terrorist attacks or alerts, civil unrest, government shutdowns, airline strikes or reduced airline capacity, economic factors and other considerations affecting travel.

To the extent that cash flows from operations and cash on hand are insufficient during any quarter due to temporary or seasonal fluctuations in lease revenue, we expect to utilize borrowings to fund distributions required to maintain our REIT status.

16 unchanged sentences

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,

2026 2025 2026 2025

Net income (loss) $ 6,942 $ (6,841) $ 24,976 $ 3,831

4 unchanged sentences

51,369 41,535 114,625 101,896

(Gain) loss on disposition of assets and hotel properties

(Gain) loss on disposition of assets and hotel property (17,395) — (17,398) —

EBITDAre 33,974 41,535 97,227 101,896

1 unchanged sentence

Transaction and conversion costs

1,144 471 3,819 1,166

Write-off of premiums, loan costs and exit fees 1,484 3 1,489 1,467

2 unchanged sentences

Legal, advisory and settlement costs

808 (4,626) 1,312 (4,482)

Advisory services incentive fee — 188 — 270

Other (income) expense

— 1,250 — 1,250

Adjusted EBITDAre $ 37,793 $ 38,866 $ 104,326 $ 101,869

13 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,

2026 2025 2026 2025

Net income (loss) $ 6,942 $ (6,841) $ 24,976 $ 3,831

9 unchanged sentences

Equity in (earnings) loss of unconsolidated entity — — 31 —

(Gain) loss on disposition of assets and hotel properties

(Gain) loss on disposition of assets and hotel property (17,395) — (17,398) —

FFO available to common stockholders and OP unitholders 3,279 5,183 31,134 25,050

Deemed dividends on preferred stock

8 1,559 4,771 5,835

Transaction and conversion costs

1,144 471 3,819 1,166

Write-off of premiums, loan costs and exit fees 1,484 3 1,489 1,467

2 unchanged sentences

Legal, advisory and settlement costs

808 (4,626) 1,312 (4,482)

Interest expense accretion on refundable membership club deposits 120 135 255 286

Amortization of loan costs (1)

2,441 2,651 4,850 4,748

Advisory services incentive fee — 188 — 270

Other (income) expense

— 1,250 — 1,250

Adjusted FFO available to common stockholders and OP unitholders $ 9,562 $ 6,932 $ 47,905 $ 36,046

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,

2026 2025 2026 2025

Depreciation and amortization on real estate $ — $ (670) $ — $ (1,389)

Amortization of loan costs — (36) — (71)

The following table presents certain information related to our hotel properties as of March 31, 2026:

The following table presents certain information related to our hotel properties as of June 30, 2026:

Hotel Property Location Total Rooms

7 unchanged sentences

Thomas, USVI 180

Park Hyatt Beaver Creek Resort & Spa Beaver Creek, CO 193

Hotel Yountville Yountville, CA 80

11 unchanged sentences

(1) The above information does not include the operations of the voluntary rental program with respect to condominium units not owned by the Company.

(2) Includes 138 hotel rooms and five residences adjacent to the hotel.

(2) Includes 138 hotel rooms and one residence adjacent to the hotel.

(3) The above information does not include the operations of the voluntary rental program with respect to residential units not owned by the Company.

3 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