What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-05-06 compared with 2024-11-06 · 183 added, 301 removed, 332 unchanged (59% of the section changed)

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We are a REIT organized under the laws of the State of Maryland.

As of September 30, 2024, we owned 959 properties in 46 states, the District of Columbia, Canada and Puerto Rico.

Consumer confidence, corporate travel and lodging demand will continue to be affected by economic and market conditions, inflationary pressures, including high interest rates, unemployment levels, work from home policies, use of technologies and broader economic trends.

As of March 31, 2025, we owned 941 properties in 46 states, the District of Columbia, Canada and Puerto Rico.

Consumer confidence, corporate travel and lodging demand will continue to be affected by economic and market conditions, inflationary pressures, uncertainties surrounding interest rates, unemployment levels, work from home policies, use of technologies and broader economic trends.

Increased labor costs and other price inflation may continue to negatively impact our hotel operations and the operations of our tenants.

Further, recent announcements regarding tariffs on a wide variety of imports could impact the cost of products our operators use, such as furniture, equipment, materials and supplies sourced from outside the United States.

An economic recession or continued or intensified disruptions in the financial markets could adversely affect our financial condition, operations at our hotels, our tenants and their ability or willingness to renew our leases or pay rent to us, may restrict our ability to obtain new or replacement financing, would likely increase our cost of capital, and may cause the values of our properties to decline.

We have also been implementing a significant renovation plan that has caused disruption at certain of our hotels.

On October 16, 2024, we announced our plan to sell 114 focused service hotels managed by Sonesta with an aggregate of 14,925 keys and a net carrying value of $850,000.

We expect to sell these hotels in 2025 and use the net sales proceeds from these sales to repay debt.

We expect that the sales of these hotels will result in savings of approximately $725,000 in capital expenditures, which was projected to be spent over a six year period.

To further improve our liquidity beginning with the fourth quarter of 2024, we reduced our regular quarterly cash distribution on our common shares from $0.20 per common share to $0.01 per common share, which we expect to result in $127,000 of annual savings.

We are at various stages of selling 119 hotels with a total of 15,912 keys and a combined net carrying value of $945,100.

We expect to sell these hotels in 2025 and use the net proceeds to repay debt.

Management Agreements and Leases .

At September 30, 2024, we owned 214 hotels operated under four agreements.

At March 31, 2025, we owned 202 hotels operated under four agreements.

We leased all of these hotels to our wholly owned TRSs that are managed by hotel operating companies as of that date.

At September 30, 2024, we also owned 745 service-focused retail properties leased to 176 tenants subject to “triple net” leases, where the tenants are generally responsible for the payment of operating expenses and capital expenditures.

At March 31, 2025, we also owned 739 service-focused retail properties leased to 175 tenants subject to “triple net” leases, where the tenants are generally responsible for the payment of operating expenses and capital expenditures.

Our condensed consolidated statements of comprehensive income (loss) include hotel operating revenues and hotel operating expenses of our managed hotels and rental income and net lease operating expenses from our net lease properties.

Hotel Portfolio.

As of September 30, 2024, we owned 214 hotels.

During the three and nine months ended September 30, 2024, the U.S.

hotel industry generally realized increases in revenue per available room, or RevPAR, and average daily rate, or ADR, compared to the same periods in 2023.

Our comparable hotels produced year over year declines in RevPAR, which we believe is partially a result of disruption and displacement at certain of our hotels undergoing renovation and decreased business activity in areas where some of our hotels are located.

The following table provides a summary for all of our hotels with these revenue metrics for the periods presented, which we believe are key indicators of performance at our hotels.

Three Months Ended September 30,

Nine Months Ended September 30,

2024 2023 Change 2024 2023 Change

of hotels 214 221 (7) 214 221 (7)

of rooms or suites 36,875 37,777 (902) 36,875 37,777 (902)

Occupancy 67.2 % 67.2 % — pts 64.1 % 64.2 % (0.1) pts

ADR $ 140.66 $ 140.77 (0.1) % $ 141.73 $ 142.05 (0.2) %

RevPAR $ 94.58 $ 94.60 — % $ 90.84 $ 91.20 (0.4) %

As of March 31, 2025, we owned 202 hotels.

During the three months ended March 31, 2025, the U.S.

hotel industry generally realized increases in average daily rate, or ADR, and revenue per available room, or RevPAR, compared to the corresponding 2024 periods.

Our hotels produced increases in ADR and outpaced the industry increases in RevPAR, which we believe is partially a result of renovation disruption in the 2024 period.

Comparable Hotels Data.

We present RevPAR, ADR and occupancy for the periods presented on a comparable basis to facilitate comparisons between periods.

We present occupancy, ADR and RevPAR for the periods presented on a comparable basis to facilitate comparisons between periods.

We define comparable hotels as those that were owned by us and were open and operating for the entirety of the periods being compared.

For each of the three months ended September 30, 2024 and 2023, our comparable results exclude one hotel that suspended operations during the periods presented.

For each of the nine months ended September 30, 2024 and 2023, our comparable results exclude two hotels.

One of the hotels was not owned for the entirety of the periods presented and the other suspended operations during the periods presented.

For each of the three months ended March 31, 2025 and 2024, our comparable results exclude one hotel that suspended operations during the periods presented.

The following table provides a summary of these revenue metrics for the periods presented.

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 Change 2024 2023 Change

Three Months Ended March 31,

2025 2024 Change

Comparable Hotels

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of rooms or suites 35,261 35,261 —

Occupancy 67.3 % 67.5 % (0.2) pts 64.1 % 64.6 % (0.5) pts

Occupancy 57.9 % 57.1 % 0.8 pts

ADR $ 144.61 $ 142.74 1.3 %

RevPAR $ 83.67 $ 81.52 2.6 %

The following table provides a summary for all of our hotels with these revenue metrics for the periods presented, which we believe are key indicators of performance at our hotels.

Three Months Ended March 31,

2025 2024 Change

of hotels 202 220 (18)

of rooms or suites 35,359 37,697 (2,338)

Occupancy 57.8 % 56.3 % 1.5 pts

ADR $ 144.61 $ 139.83 3.4 %

RevPAR $ 83.52 $ 78.69 6.1 %

Net Lease Portfolio .

As of September 30, 2024, we owned 745 service-focused retail net lease properties with an aggregate of 13,332,131 square feet leased to 176 tenants subject to “triple net” leases (where the tenants are responsible for payments of operating expenses and capital expenditures) requiring annual minimum rents of $380,034.

Our net lease properties were 97.6% occupied as of September 30, 2024 with a weighted (by annual minimum rent) average lease term of 8.3 years, operating under 137 brands in 21 distinct industries.

TA is our largest tenant and as of September 30, 2024, leased 175 of our travel centers under five master leases that expire in 2033 and require annual minimum rents of $259,080.

As of March 31, 2025, we owned 739 service-focused retail net lease properties with an aggregate of 13,189,476 square feet leased to 175 tenants subject to “triple net” leases (where the tenants are responsible for payments of operating expenses and capital expenditures) requiring annual minimum rents of $380,568.

Our net lease properties were 97.8% occupied as of March 31, 2025 with a weighted (by annual minimum rent) average lease term of 7.8 years, operating under 136 brands in 21 distinct industries.

TA is our largest tenant and as of March 31, 2025, leased 175 of our travel centers under five master leases that expire in 2033 and require annual minimum rents of $259,080.

In addition, TA receives an annual credit of $25,000 as a result of prepaid rent.

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Results of Operations (amounts in thousands, except per share data)

Three Months Ended September 30, 2024 Compared to the Three Months Ended September 30, 2023

Three Months Ended September 30,

2024 2023 Increase (Decrease) % Increase (Decrease)

Hotel operating revenues $ 390,935 $ 395,526 $ (4,591) (1.2) %

Rental income 100,236 101,299 (1,063) (1.0) %

Total revenues 491,171 496,825 (5,654) (1.1) %

Hotel operating expenses 328,535 317,752 10,783 3.4 %

Net lease operating expenses 4,791 4,802 (11) (0.2) %

Depreciation and amortization - hotels 52,762 54,402 (1,640) (3.0) %

Depreciation and amortization - net lease properties 36,243 40,096 (3,853) (9.6) %

Total depreciation and amortization 89,005 94,498 (5,493) (5.8) %

General and administrative 10,472 10,849 (377) (3.5) %

Transaction related costs — 115 (115) n/m

Loss on asset impairment, net 13,692 512 13,180 n/m

Total expenses 446,495 428,528 17,967 4.2 %

Gain on sale of real estate, net 4,105 123 3,982 n/m

Interest income 537 5,626 (5,089) (90.5) %

Interest expense (99,126) (82,280) (16,846) 20.5 %

Loss on early extinguishment of debt, net (133) — (133) n/m

Loss before income tax benefit and equity in earnings of an investee (49,941) (8,234) (41,707) n/m

Income tax benefit 77 2,242 (2,165) (96.6) %

Equity in earnings of an investee 2,963 1,864 1,099 59.0 %

Net loss $ (46,901) $ (4,128) $ (42,773) n/m

Weighted average common shares outstanding (basic and diluted) 165,398 165,027 371 0.2 %

Net loss per common share (basic and diluted) $ (0.28) $ (0.03) $ (0.25) n/m

References to changes in the income and expense categories below relate to the comparison of consolidated results for the three months ended September 30, 2024 compared to the three months ended September 30, 2023.

Hotel operating revenues.

The decrease in hotel operating revenues is primarily a result of our sale of certain hotels since July 1, 2023 ($2,982) and lower RevPAR at certain hotels during the 2024 period ($1,609).

Additional operating statistics of our hotels are included in the tables beginning on page 36.

Rental income.

The decrease in rental income is primarily a result of lower rental income recognized at certain of our net lease properties ($737) and the sale of certain net lease properties since July 1, 2023 ($326).

Hotel operating expenses.

The increase in hotel operating expenses is primarily a result of increases in wages and benefits ($8,995) and other operating expenses in the 2024 period ($5,727), partially offset by our sales of certain hotels since July 1, 2023 ($3,939).

Net lease operating expenses.

The decrease in net lease operating expenses is primarily the result of our sale of certain net lease properties since July 1, 2023 ($439), partially offset by increased operating expenses at certain net lease properties in the 2024 period ($428).

Depreciation and amortization - hotels.

The decrease in depreciation and amortization - hotels is primarily a result of certain of our depreciable assets becoming fully depreciated since July 1, 2023 ($2,503) and our sale of certain hotels since July 1, 2023 ($1,102), partially offset by depreciation and amortization related to capital expenditures made since July 1, 2023 ($1,965).

Depreciation and amortization - net lease properties.

The decrease in depreciation and amortization - net lease properties is primarily a result of certain of our depreciable assets becoming fully depreciated since July 1, 2023 ($3,611) and our sale of certain net lease properties since July 1, 2023 ($242).

General and administrative.

The decrease in general and administrative costs is primarily due to a decrease in business management fees in the 2024 period ($876), partially offset by an increase in other professional fees ($499).

Transaction related costs .

Transaction related costs for the 2023 period primarily consisted of costs related to hotel rebranding activity.

Loss on asset impairment, net.

We recorded a $13,692 net loss on asset impairment during the 2024 period to reduce the carrying value of four hotels and two net lease properties to their estimated fair value or estimated fair value less costs to sell.

We recorded a $512 net loss on asset impairment during the 2023 period to reduce the carrying value of three net lease properties to their estimated fair value less costs to sell.

Gain on sale of real estate, net.

We recorded a $4,105 net gain on sale of real estate during the 2024 period in connection with the sale of six hotels and four net lease properties.

We recorded a $123 net gain on sale of real estate during the 2023 period in connection with the sale of two net lease properties.

Interest income.

The decrease in interest income is due to lower average cash balances invested during the 2024 period compared to the 2023 period.

Interest expense.

The increase in interest expense is primarily due to higher weighted average interest rates during the 2024 period compared to the 2023 period.

Loss on early extinguishment of debt, net.

We recorded a $133 loss on early extinguishment of debt, net in the 2024 period as a result of the redemption and purchase of certain senior notes in the 2024 period.

Income tax benefit.

The decrease in income tax benefit is primarily due to decreases in state tax benefit ($1,723) and foreign tax benefit ($442) during the 2024 period due to changes in our annual tax provision.

Equity in earnin gs of an investee.

Equity in earnings of an investee represents our proportionate share of the earnings of Sonesta.

Our net loss and net loss per common share (basic and diluted) each increased in the 2024 period compared to the 2023 period primarily due to the revenue and expense changes discussed above.

Nine Months Ended September 30, 2024 Compared to the Nine Months Ended September 30, 2023

Nine Months Ended September 30,

2024 2023 Increase (Decrease) % Increase (Decrease)

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

Three Months Ended March 31,

2025 2024 $ Change % Change

Hotel operating revenues $ 334,963 $ 336,236 $ (1,273) (0.4) %

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Transaction related costs 111 — 111 n/m

Loss on asset impairment, net 51,030 9,517 41,513 n/m

Loss on asset impairment 37,067 2,451 34,616 n/m

Total expenses 447,302 415,873 31,429 7.6 %

Gain on sale of real estate, net 1,110 41,959 (40,849) (97.4) %

Gain on equity securities, net — 48,837 (48,837) n/m

Gain (loss) on sale of real estate, net 746 (2,963) 3,709 (125.2) %

Interest income 1,249 1,962 (713) (36.3) %

Interest expense (101,517) (91,414) (10,103) 11.1 %

Loss on early extinguishment of debt, net (16,181) (282) (15,899) n/m

(Loss) income before income tax (expense) benefit and equity in losses of an investee (192,589) 11,609 (204,198) n/m

Income tax (expense) benefit (1,454) 775 (2,229) n/m

Loss before income tax expense and equity in losses of an investee (111,645) (72,038) (39,607) 55.0 %

Income tax expense (843) (1,007) 164 (16.3) %

Equity in losses of an investee (3,947) (5,338) 1,391 (26.1) %

Net (loss) income $ (199,134) $ 10,544 $ (209,678) n/m

Net loss $ (116,435) $ (78,383) $ (38,052) 48.5 %

Weighted average common shares outstanding (basic and diluted) 165,615 165,158 457 0.3 %

Net (loss) income per common share (basic and diluted) $ (1.21) $ 0.06 $ (1.27) n/m

References to changes in the income and expense categories below relate to the comparison of consolidated results for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

Net loss per common share (basic and diluted) $ (0.70) $ (0.48) $ (0.22) 45.8 %

References to changes in the income and expense categories below relate to the comparison of consolidated results for the three months ended March 31, 2025, compared to the three months ended March 31, 2024.

Hotel operating revenues.

The increase in hotel operating revenues is primarily a result of a hotel acquisition in the 2023 period ($16,531), partially offset by lower RevPAR at certain of our hotels ($8,643) and our sale of certain hotels since January 1, 2023 ($2,880).

The decrease in hotel operating revenues is primarily a result of our sales of certain hotels since January 1, 2024 ($7,798), partially offset by increases in occupancy and average rates at certain hotels during the 2025 period ($6,525).

Additional operating statistics of our hotels are included in the tables beginning on page 32.

Rental income.

The increase in rental income is primarily a result of the amended TA leases that were effective starting in May 2023 ($8,107), partially offset by lower rental income recognized at certain net lease properties in the 2024 period ($1,825) and the sale of certain net lease properties since January 1, 2023 ($734).

The increase in rental income is primarily a result of higher rental income recognized at certain of our net lease properties ($710), partially offset by our sales of certain net lease properties since January 1, 2024 ($508).

Hotel operating expenses.

The increase in hotel operating expenses is primarily a result of a hotel acquisition ($11,384) in the 2023 period and increases in wages and benefits ($15,441), property insurance ($4,706) and other operating expenses in the 2024 period ($4,274), partially offset by our sale of certain hotels since January 1, 2023 ($355).

The increase in hotel operating expenses is primarily a result of increases in wages and benefits ($6,967) and other operating expenses ($2,697) in the 2025 period, partially offset by our sales of certain hotels since January 1, 2024 ($8,910).

Net lease operating expenses.

The increase in net lease operating expenses is primarily the result of increased property management fees in the 2024 period ($1,737), partially offset by decreases in other operating expenses at certain net lease properties ($235) and our sale of certain net lease properties since January 1, 2023 ($109).

The increase in net lease operating expenses is primarily the result of increased property management fees ($594) and other operating expenses ($311) in the 2025 period.

Depreciation and amortization - hotels.

The increase in depreciation and amortization - hotels is primarily a result of depreciation and amortization related to capital expenditures made since January 1, 2023 and our acquisition of a hotel in June

2023 ($10,201), partially offset by certain of our depreciable assets becoming fully depreciated since January 1, 2023 ($7,076) and the sale of certain hotels since January 1, 2023 ($1,124).

The decrease in depreciation and amortization - hotels is primarily a result of certain of our depreciable assets becoming fully depreciated since January 1, 2024 ($5,769) and our sale of certain hotels since January 1, 2024 ($2,498), partially offset by depreciation and amortization related to capital expenditures made since January 1, 2024 ($6,924).

Depreciation and amortization - net lease properties.

The decrease in depreciation and amortization -net lease properties is primarily a result of our sale of certain net lease properties since January 1, 2023 ($7,090) and certain of our depreciable assets becoming fully depreciated since January 1, 2023 ($6,233).

The decrease in depreciation and amortization - net lease properties is primarily a result of certain of our depreciable assets becoming fully depreciated since January 1, 2024 ($2,129) and our sale of certain net lease properties since January 1, 2024 ($535).

General and administrative.

The decrease in general and administrative costs in the 2024 period is primarily due to decreases in business management fees ($2,351) and other professional fees ($170).

Transaction related cos ts.

Transaction related costs for the 2023 period primarily consisted of costs related to hotel rebranding activity, the demolition of certain vacant properties and potential acquisitions.

Loss on asset impairment, net.

We recorded a $51,030 net loss on asset impairment during the 2024 period to reduce the carrying value of ten hotels and eight net lease properties to their estimated fair value or estimated fair value less costs to sell.

We recorded a $9,517 net loss on asset impairment during the 2023 period to reduce the carrying value of 16 net lease properties to their estimated fair value less costs to sell.

Gain on sale of real estate, net.

We recorded a $1,110 net gain on sale of real estate during the 2024 period in connection with the sale of seven hotels and seven net lease properties.

We recorded a $41,959 net gain on sale of real estate during the 2023 period in connection with the sale of 18 hotels and four net lease properties.

Gain on equity securities, net.

Gain on equity securities, net represents the adjustment to the carrying value of our former investment in shares of TA common stock to its fair value.

The decrease in general and administrative costs is primarily due to decreases in business management fees ($827) and other professional fees ($123) in the 2025 period.

Transaction related costs .

Transaction related costs for the 2025 period primarily consisted of costs related to the renovation of certain hotels, partially offset by the recovery of a working capital reserve related to our former agreement with Marriott International, Inc.

previously deemed uncollectable and expensed in 2021.

Loss on asset impairment.

We recorded a $37,067 loss on asset impairment during the 2025 period to reduce the carrying value of 16 hotels to their estimated fair value less costs to sell.

We recorded a $2,451 loss on asset impairment during the 2024 period to reduce the carrying value of five net lease properties to their estimated fair value less costs to sell.

Gain (loss) on sale of real estate, net.

We recorded a $746 net gain on sale of real estate during the 2025 period in connection with the sales of four hotels and three net lease properties.

We recorded a $2,963 net loss on sale of real estate during the 2024 period in connection with the sales of one hotel and three net lease properties.

Interest income.

The decrease in interest income is due to lower average cash balances invested during the 2024 period compared to the 2023 period.

The decrease in interest income is due to lower average cash balances invested and lower interest rates during the 2025 period compared to the 2024 period.

Interest expense.

The increase in interest expense is primarily due to higher weighted average interest rates during the 2025 period compared to the 2024 period.

Loss on early extinguishment of debt, net.

We recorded a $16,181 loss on early extinguishment of debt, net in the 2024 period as a result of the redemption and purchase of certain senior notes in the 2024 period.

We recorded a $282 loss on early extinguishment of debt, net in connection with our redemption of certain senior unsecured notes and the write off of certain deferred financing costs relating to the amendment of our revolving credit facility in the 2023 period.

Income tax (expense) benefit.

The increase in income tax expense is primarily due to increases in our state income tax expense ($1,845) and foreign sourced income tax expense ($384) during the 2024 period.

Income tax expense.

The decrease in income tax expense is primarily due to a decrease in state tax expense ($268), partially offset by an increase in foreign tax expense ($104) during the 2025 period.

Equity in losses of an investee.

Equity in losses of an investee represents our proportionate share of the losses of Sonesta.

Net (loss) income.

Our net (loss) income and net (loss) income per common share (basic and diluted) each decreased in the 2024 period compared to the 2023 period primarily due to the revenue and expense changes discussed above.

Our net loss and net loss per common share (basic and diluted) each increased in the 2025 period compared to the 2024 period primarily due to the revenue and expense changes discussed above.

Liquidity and Capital Resources (dollars in thousands, except per share amounts)

Our Managers and Tenants

As of September 30, 2024, all 214 of our hotels were managed by four hotel operating companies.

Our 745 service-focused retail net lease properties were leased to 176 tenants as of September 30, 2024.

As of March 31, 2025, all 202 of our hotels were managed by four hotel operating companies.

Our 739 service-focused retail net lease properties were leased to 175 tenants.

The costs of operating and maintaining our properties are generally paid by the hotel managers as agents for us or by our tenants for their own account.

Our hotel managers and tenants derive their funding for property operating expenses and for returns and rents due to us generally from property operating revenues and, to the extent these parties themselves fund our owner’s priority returns and rents, from their separate resources.

As of September 30, 2024, our hotel managers included Sonesta (189 hotels), Hyatt (17 hotels), Radisson (seven hotels) and IHG (one hotel).

TA is our largest tenant (175 travel centers).

We recorded reserves for uncollectable amounts and reduced rental income by $515 and $1,557 for the three and nine months ended September 30, 2024, respectively, based on our assessment of the collectability of rents.

We reduced reserves for uncollectible amounts and increased rental income by $1,041 for the three months ended September 30, 2023 and recorded reserves for uncollectable amounts and reduced rental income by $4,312 for the nine months ended September 30, 2023, based on our assessment of the collectability of rents.

We had reserves for uncollectable rents of $4,872 and $3,436 as of September 30, 2024 and December 31, 2023, respectively, included in other assets, net in our condensed consolidated balance sheets.

We define net lease coverage as earnings before interest, taxes, depreciation, amortization and rent, or EBITDAR, divided by the annual minimum rent due to us weighted by the minimum rent of the property to total minimum rents of the net lease portfolio.

As of March 31, 2025, Sonesta is our largest hotel manager (177 hotels) and TA is our largest tenant (175 travel centers).

We recorded reserves for uncollectable amounts and reduced rental income by $235 and $665 for the three months ended March 31, 2025 and 2024, respectively, based on our assessment of the collectability of rents.

We had reserves for uncollectable rents of $4,959 and $5,058 as of March 31, 2025 and December 31, 2024, respectively, included in other assets, net in our condensed consolidated balance sheets.

We define net lease rent coverage as earnings before interest, taxes, depreciation, amortization and rent, or EBITDAR, divided by the annual minimum rent due to us weighted by the minimum rent of the property to total minimum rents of the net lease portfolio.

Tenants with no minimum rent required under the lease are excluded.

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As a result, we believe using this implied coverage metric provides a more reasonable estimated representation of recent operating results and the financial condition for those tenants.

Our net lease properties generated coverage of 2.16x and 2.72x as of September 30, 2024 and 2023, respectively.

Our net lease properties generated rent coverage of 2.07x and 2.37x as of March 31, 2025 and 2024, respectively.

Our Operating Liquidity and Capital Resources

Our principal sources of funds to meet operating and capital expenses, debt service obligations and distributions to our shareholders are owner’s priority returns from our hotels, rents from our net lease portfolio and borrowings under our revolving credit facility.

We receive owner’s priority returns and rents from our managers and tenants monthly.

We may receive additional returns, percentage rents and our share of the operating profits of our managed hotels after payment of management fees and other deductions, if any, either monthly or quarterly, and these amounts are usually subject to annual reconciliations.

We believe these sources of funds will be sufficient to meet our operating expenses and capital expenditures and pay debt service obligations and make distributions to our shareholders for the next twelve months and for the foreseeable future thereafter.

We believe these sources of funds will be sufficient to meet our operating expenses and capital expenditures, pay debt service obligations and make distributions to our shareholders for the next twelve months and for the foreseeable future thereafter.

However, as a result of economic conditions, including if the U.S.

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The following is a summary of our sources and uses of cash flows for the periods presented:

Nine Months Ended September 30,

Three Months Ended March 31,

Cash and cash equivalents and restricted cash at the beginning of the period $ 157,386 $ 197,830

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Cash and cash equivalents and restricted cash at the end of the period $ 94,094 $ 87,326

The decrease in cash flow provided by operating activities in the 2024 period is primarily due to $188,000 of prepaid rent received from TA in the 2023 period, higher interest expense and lower hotel returns in the 2024 period.

The change from cash flow provided by investing activities in the 2023 period to cash flow used in investing activities in the 2024 period is primarily due to proceeds from the sale of TA common shares and higher proceeds from the sale of real estate in the 2023 period and increased real estate improvements during the 2024 period.

The increase in cash flow used in financing activities in the 2024 period is primarily due to higher net borrowings in the 2023 period.

The change from cash flow used in operating activities in the 2024 period to cash flow provided by operating activities in the 2025 period is primarily due to lower cash paid for interest in the 2025 period.

The decrease in cash flow used in investing activities in the 2025 period is primarily due to higher proceeds from the sale of real estate in the 2025 period and decreased real estate improvements during the 2025 period.

The increase in cash flow used in financing activities in the 2025 period is primarily due to higher net borrowings in the 2025 period, partially offset by lower distributions to common shareholders during the 2025 period.

We maintain our qualification for taxation as a REIT under the IRC by meeting certain requirements.

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Our hotel operating agreements generally provide that, if necessary, we may provide our managers with funding for capital improvements to our hotels in excess of amounts otherwise available in escrowed FF&E reserves or when no FF&E reserves are available.

During the nine months ended September 30, 2024, we funded $208,820 for capital improvements in excess of FF&E reserves available to our hotels using cash on hand.

We currently expect to fund $85,000 for capital improvements to certain hotels during the last three months of 2024 using cash on hand and borrowings under our revolving credit facility.

During the three months ended March 31, 2025, we funded $44,053 for capital improvements in excess of FF&E reserves available to our hotels.

We currently expect to fund $210,000 during the last nine months of 2025 for capital improvements to certain hotels using cash on hand and borrowings under our revolving credit facility.

Various percentages of total sales at some of our hotels are escrowed as FF&E reserves to fund future capital improvements.

We own all the FF&E escrows for our hotels.

During the nine months ended September 30, 2024, certain of our hotel managers deposited $4,402 to these accounts and spent $4,609 from the FF&E reserve escrow accounts to renovate and refurbish our hotels.

As of September 30, 2024, there was $5,475 on deposit in these escrow accounts, which was held directly by us and is reflected in our condensed consolidated balance sheets as restricted cash.

During the three months ended March 31, 2025, certain of our hotel managers deposited $971 to these accounts and spent $1,124 from the FF&E reserve escrow accounts to renovate and refurbish our hotels.

As of March 31, 2025, there was $5,289 on deposit in these escrow accounts, which was held directly by us and is reflected in our condensed consolidated balance sheets as restricted cash.

Our net lease portfolio leases do not require FF&E escrow deposits and tenants under these leases are generally required to maintain the leased properties, including structural and non-structural components.

We may provide tenant improvement allowances to tenants in certain cases or may develop sites with the intent to lease them.

During the nine months ended September 30, 2024, we funded $3,931 for capital improvements to our net lease properties.

As of September 30, 2024, we had $1,889 of unspent leasing-related obligations related to certain of our net lease tenants.

During the nine months ended September 30, 2024, we sold seven hotels with an aggregate of 906 keys for an aggregate sales price of $48,215, excluding closing costs, and seven net lease properties with an aggregate of 86,937 square feet for an aggregate sales price of $6,532, excluding closing costs.

From October 1, 2024 through November 4, 2024, we sold five hotels with an aggregate of 642 keys for an aggregate sales price of $32,200, excluding closing costs.

As of November 4, 2024, we have entered into agreements to sell eight hotels with an aggregate of 985 keys for an aggregate sales price of $44,150, excluding closing costs, and one net lease property with 3,381 square feet for a sales price of $1,000, excluding closing costs.

During the three months ended March 31, 2025, we funded $748 for capital improvements to our net lease properties.

As of March 31, 2025, we had $1,382 of unspent leasing-related obligations related to certain of our net lease tenants.

During the three months ended March 31, 2025, we sold seven properties for a combined sales price of $22,700, excluding closing costs.

From April 1, 2025 through May 2, 2025, we sold one net lease property with 2,053 square feet for a sales price of $365, excluding closing costs.

We have also entered into agreements to sell four hotels with a total of 492 keys for a combined sales price of $26,500, excluding closing costs, and one net lease property with 1,122 square feet for a sales price of $395, excluding closing costs.

These pending sales are subject to conditions;

accordingly, we cannot be sure that we will complete these sales, that these sales will not be delayed or that the terms will not change.

We continue to market three hotels with an aggregate of 383 keys and nine net lease properties with an aggregate of 132,860 square feet for sale.

We are at various stages of selling 115 hotels with a total of 15,420 keys and six net lease properties with a total of 80,249 square feet for sale.

We believe it is probable that the sales of these properties will be completed within one year.

We expect to use the net sales proceeds from these sales for general business purposes.

In October 2024, we announced our plan to sell 114 focused service hotels managed by Sonesta, with an aggregate of 14,925 keys and an aggregate net carrying value of $850,000.

We expect to sell these hotels in 2025 and use the net sales proceeds from these sales to repay debt.

We expect that the sales of these hotels will result in savings of approximately $725,000 in capital expenditures, which was projected to be spent over a six year period.

In March 2024, we made a $3,392 pro rata capital contribution to Sonesta to support its growth initiatives, including its franchising efforts, using cash on hand.

We continue to maintain our 34% ownership in Sonesta after giving effect to this contribution.

During the nine months ended September 30, 2024, we declared and paid regular quarterly distributions to our common shareholders using cash on hand as follows:

We expect to use the net sales proceeds from these sales for general business purposes, including to repay debt.

From April 1, 2025 through May 2, 2025, we acquired three net lease properties with a total of 18,218 square feet for a combined purchase price of $12,597, excluding closing costs.

We have also entered into agreements to acquire six net lease properties with a total of 69,236 square feet for a combined purchase price of $20,734, excluding closing costs.

These pending acquisitions are subject to conditions;

accordingly, we cannot be sure that we will complete these acquisitions, that these acquisitions will not be delayed or that the terms will not change.

During the three months ended March 31, 2025, we declared and paid a regular quarterly distribution to common shareholders using cash on hand as follows:

Declaration Date Record Date Paid Date Dividend Per Common Share Total Distributions

January 16, 2025 January 27, 2025 February 20, 2025 $ 0.01 $ 1,666

April 11, 2024 April 22, 2024 May 16, 2024 0.20 33,152

July 11, 2024 July 22, 2024 August 15, 2024 0.20 33,178

$ 0.60 $ 99,484

On October 16, 2024, we declared a regular quarterly distribution to common shareholders of record as of October 28, 2024 of $0.01 per common share, or approximately $1,666.

We expect to pay this distribution on or about November 14, 2024 using cash on hand.

On April 10, 2025, we declared a regular quarterly distribution to common shareholders of record as of April 22, 2025 of $0.01 per common share, or approximately $1,666.

We expect to pay this distribution on or about May 15, 2025 using cash on hand.

In order to meet cash needs that may result from our desire or need to make distributions or pay operating or capital expenses, we maintain a $650,000 secured revolving credit facility which is governed by a credit agreement.

This revolving credit facility is available for general business purposes, including acquisitions.

We can borrow, repay, and reborrow funds available under the revolving credit facility until maturity and no principal repayments are due until maturity.

We can borrow, repay and reborrow funds available under our revolving credit facility until maturity and no principal repayments are due until maturity.

Availability of borrowings under our credit agreement is subject to ongoing minimum performance and market values of the collateral properties, satisfying certain financial covenants and other credit facility conditions.

The maturity date of our revolving credit facility is June 29, 2027, and, subject to the payment of an extension fee and meeting certain other conditions, we have an option to further extend the stated maturity date by two additional six-month periods.

Interest payable on drawings under our revolving credit facility is based on SOFR plus a margin ranging from 1.50% to 3.00% based on our leverage ratio, as defined in our credit agreement, which was 2.50% as of September 30, 2024.

As collateral for all loans and other obligations under the facility, certain of our subsidiaries pledged all of their respective equity interests in certain of our direct and indirect property owning subsidiaries, and our pledged subsidiaries provided first mortgage liens on 70 properties, including 67 hotels and three net lease properties, with an aggregate undepreciated carrying value of $1,720,032 as of September 30, 2024.

During the three months ended September 30, 2024, we sold two hotels that served as collateral under our revolving credit facility.

In connection with the sales of these hotels, the hotels were released from the collateral pool in accordance with the terms of our revolving credit facility.

We also pay unused commitment fees of 20 to 30 basis points per annum on the total amount of lending commitments under our revolving credit facility based on amounts outstanding.

As of September 30, 2024 and 2023, the annual interest rate payable on borrowings under our revolving credit facility was 7.46% and 7.93%, respectively.

We had no borrowings outstanding under our revolving credit facility as of September 30, 2024.

Availability under our revolving credit facility is partially based on the performance of the properties serving as collateral under the facility.

Based on recent and near term expectations of performance of certain of the collateral properties, we and our lenders amended the credit facility in October 2024 to temporarily reduce the required collateral property debt yield from 12% to 8.5% from September 30, 2024 through December 31, 2024, and increase the required collateral property debt yield to 9.5% for the quarter ending March 31, 2025;

10% for the quarter ending June 30, 2025;

11% for the quarter ending September 30, 2025;

and 12% for the quarter ending December 31, 2025 and thereafter.

Subject to meeting these revised collateral property debt yield levels and meeting other conditions, we currently have full access to undrawn amounts under our revolving credit facility.

In June 2024 , we issued $700,000 aggregate principal amount of the 2029 Notes and $500,000 aggregate principal amount of the 2032 Notes in underwritten public offerings.

The aggregate net proceeds from these offerings were $1,162,077, after underwriting discounts and other offering expenses.

These notes are fully and unconditionally guaranteed, on a joint and several basis and on a senior unsecured basis, by all of our subsidiaries, except for our foreign subsidiaries and certain other excluded subsidiaries.

Such other excluded subsidiaries include, but are not limited to, subsidiaries whose equity has been pledged to secure borrowings under our credit agreement and our 8.625% senior secured notes due 2031 and subsidiaries whose assets secure our net lease mortgage notes.

We used the net proceeds from the issuance of these notes and cash on hand to redeem all of our outstanding 7.50% senior unsecured notes due 2025 and purchase and satisfy and discharge all of our outstanding 4.50% senior unsecured notes due 2025.

Our debt maturities (other than our revolving credit facility) as of September 30, 2024 were as follows:

Year Maturity

2028 1,000,737

As of March 31, 2025 and 2024, the annual interest rate payable on borrowings under our revolving credit facility was 6.91% and 7.84%, respectively.

As of both March 31, 2025 and May 2, 2025, we had $50,000 outstanding under our revolving credit facility and $600,000 available for borrowings.

As collateral for all loans and other obligations under the credit facility, certain of our subsidiaries pledged all of their respective equity interests in certain of our direct and indirect property owning subsidiaries, and our pledged subsidiaries provided first mortgage liens on 67 properties, including 64 hotels and three net lease properties, with an aggregate undepreciated book value of $1,691,230 as of March 31, 2025.

During the three months ended March 31, 2025, we sold two hotels that previously served as collateral under our revolving credit facility.

In connection with the sales of these hotels, the hotels were released from the collateral pool in accordance with the terms of our revolving credit facility.

In February 2025, we and our lenders amended the agreement governing our revolving credit facility to reduce the required debt service coverage ratio covenant from 1.50 times to 1.30 times effective with respect to the fourth quarter of 2024 and continuing through the end of the loan term.

In order to exercise the first extension option, we are required to maintain a 1.50 times debt service coverage level as of and for the duration of the extension period.

We also agreed to change the required collateral property debt yield to 10% effective with respect to the first quarter of 2025 and continuing through the end of the loan term and to swap collateral properties as follows:

47 hotels with an aggregate of 7,981 keys and an aggregate undepreciated book value of $1,375,449 will be released from the collateral pool and 35 travel centers leased to TA, which travel centers we refer to as our TA No.

5 lease, with an aggregate undepreciated book value of $598,908, will be added as collateral to our revolving credit facility.

Of the hotels being released from the collateral pool, 36 hotels with an aggregate of 4,862 keys and an aggregate undepreciated book value of $655,514 are part of our hotel disposition plan.

The corresponding equity pledges will be swapped as well.

We expect to complete this collateral swap by the end of the second quarter of 2025.

Net Lease Mortgage Notes

On January 27, 2025, the Issuer issued a variable funding note secured by the 315 net lease properties that secure our existing $606,122 of net lease mortgage notes.

The VFN permits borrowings on a revolving basis up to $45,000 and the Issuer can borrow, repay and reborrow funds available until maturity.

The maturity date of the VFN is January 27, 2027, and, subject to the payment of an extension fee and meeting certain other conditions, can be extended by one year at the Issuer’s option.

The VFN requires interest payments only on drawings under the VFN based on SOFR plus a margin of 1.75%, and an unused commitment fee of 50 basis points per annum paid on undrawn amounts.

As of March 31, 2025, the annual interest rate payable on borrowings under the VFN was 6.16%.

As of March 31, 2025, $45,000 was outstanding under the VFN.

Our debt maturities (other than our revolving credit facility and VFN) as of March 31, 2025 were as follows:

Year Debt Maturities

2028 1,000,737

2029 1,125,000

Thereafter 1,900,000

None of our senior note debt obligations require principal or sinking fund payments prior to their maturity dates.

Our mortgage notes require monthly principal payments as described in Part I, Item 3 of this Quarterly Report on Form 10-Q.

We currently expect to use cash on hand, the cash flows from our operations, borrowings under our revolving credit facility, net proceeds from any asset sales and net proceeds of offerings of equity or the incurrence of debt to fund our operations, capital expenditures, investments, future debt maturities, distributions to our shareholders and other general business purposes.

We currently expect to use cash on hand, the cash flows from our operations, borrowings under our revolving credit facility or VFN, net proceeds from any asset sales and net proceeds of offerings of equity or the incurrence of debt to fund our operations, capital expenditures, investments, future debt maturities, distributions to our shareholders and other general business purposes.

When significant amounts are outstanding for an extended period of time under our revolving credit facility, or the maturities of our indebtedness approach, we currently expect to explore refinancing alternatives.

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We intend to conduct our business activities in a manner which will afford us reasonable access to capital for investment and financing activities.

However, as discussed elsewhere in this Quarterly Report on Form 10-Q, the impacts of the current, and possibly future, inflationary conditions, increasing or sustained high interest rates and a possible economic recession are uncertain and may have various negative consequences on us and our operations, including a decline in financing availability and increased costs for financing.

However, as discussed elsewhere in this Quarterly Report on Form 10-Q, the impacts of the current, and possibly future, inflationary conditions, uncertainties surrounding interest rates and a possible economic recession are uncertain and may have various negative consequences on us and our operations, including a decline in financing availability and increased costs for financing.

Further, such conditions could also disrupt the capital markets generally and limit our access to financing from public sources or on favorable terms, particularly if the global financial markets experience significant disruptions.

Debt Covenants

Our debt obligations at September 30, 2024 consisted of $5,075,000 aggregate principal amounts of senior notes and $607,101 aggregate principal amounts of mortgage notes secured by 308 net lease retail properties.

Our debt obligations at March 31, 2025 consisted of $50,000 of borrowings outstanding under our $650,000 revolving credit facility, $5,075,000 aggregate principal amounts of senior notes, $606,122 aggregate principal amounts of mortgage notes and $45,000 of borrowings outstanding under the VFN.

For further information regarding our indebtedness, see Note 8 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

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Our credit agreement, net lease mortgage notes, secured senior notes and unsecured senior notes, indentures and their supplements provide for acceleration of payment of all amounts outstanding upon the occurrence and continuation of certain events of default, such as, in the case of our credit agreement, a change of control of us, which includes RMR ceasing to act as our business manager.

As of September 30, 2024, we believe we were in compliance with all of the covenants under our indentures and their supplements, net lease mortgage notes and our credit agreement.

As of March 31, 2025, we believe we were in compliance with all of the covenants under our indentures and their supplements, net lease mortgage notes and our credit agreement.

Senior Notes Indenture Covenants

The following table summarizes the results of the financial tests required by the indentures and related supplements for our senior secured and unsecured notes as of September 30, 2024:

The following table summarizes the results of the financial tests required by the indentures and related supplements for our senior secured and unsecured notes as of March 31, 2025:

Actual Results Covenant Requirement

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4.06x Minimum of 2.20x

As of September 30, 2024, adjusted total assets for covenant purposes as defined in our senior notes indentures were $10,584,590 and assets encumbered under our revolving credit facility, serving as collateral for our net lease mortgage notes or secured senior notes represented $3,517,899 of adjusted total assets, as defined in our senior notes indentures.

As of March 31, 2025, adjusted total assets for covenant purposes as defined in our senior notes indentures were $10,462,373 and assets encumbered under our revolving credit facility, serving as collateral for our net lease mortgage notes or secured senior notes represented $3,466,968 of adjusted total assets, as defined in our senior notes indentures.

Our unencumbered hotels, travel centers, other net lease properties and other corporate assets represent $4,389,459, $1,579,070, $819,950 and $206,926 of adjusted total assets, respectively.

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Adjusted total assets $ 10,462,373

(1) Includes $875,222 of accumulated depreciation on assets of properties held for sale.

Our ability to incur additional debt is subject to meeting the required covenant levels and subject to the provisions of our credit agreement and senior notes indentures.

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Supplemental Guarantor Information

Our 5.50% senior notes due 2027, or the 2027 Notes, the 2029 Notes and the 2032 Notes are fully and unconditionally guaranteed, on a joint and several basis and on a senior unsecured basis, by all of our subsidiaries, except for certain excluded subsidiaries, including our foreign subsidiaries and our subsidiaries pledged under our credit agreement and our net lease mortgage notes.

Our 5.50% Senior Notes due 2027, or the 2027 Notes, our 8.375% Senior Guaranteed Unsecured Notes due 2029, or the 2029 Notes, and our 8.875% Senior Guaranteed Unsecured Notes due 2032, or the 2032 Notes, are fully and unconditionally guaranteed, on a joint and several basis and on a senior unsecured basis, by all of our subsidiaries, except for certain excluded subsidiaries, including our foreign subsidiaries and our subsidiaries pledged under our credit agreement and our net lease mortgage notes.

The notes and the guarantees will be effectively subordinated to all of our and the subsidiary guarantors’ secured indebtedness, respectively, to the extent of the value of the collateral securing such secured indebtedness, and will be structurally subordinated to all indebtedness and other liabilities and any preferred equity of any of our subsidiaries that do not guarantee the notes.

Our remaining $2,425,000 of senior unsecured notes do not have the benefit of any guarantees.

circumstances, including on or after the date on which (a) the notes have received a rating equal to or higher than Baa2 (or the equivalent) by Moody’s Investor Services, or Moody’s, or BBB (or the equivalent) by Standard & Poor’s Ratings Services, or S&P, or if Moody’s or S&P ceases to rate the notes for reasons outside of our control, the equivalent investment grade rating from any other rating agency and (b) no default or event of default has occurred and is continuing under the indenture.

A subsidiary guarantor’s guarantee of the 2027 Notes, the 2029 Notes and the 2032 Notes and all other obligations of such subsidiary guarantor under the indentures governing the notes will automatically terminate and such subsidiary guarantor will automatically be released from all of its obligations under such subsidiary guarantee and such indenture under certain circumstances, including on or after the date on which (a) the notes have received a rating equal to or higher than Baa2 (or the equivalent) by Moody’s Investor Services, or Moody’s, and BBB (or the equivalent) by Standard & Poor’s Ratings Services, or S&P, or if Moody’s or S&P ceases to rate the notes for reasons outside of our control, the equivalent investment grade rating from any other rating agency and (b) no default or event of default has occurred and is continuing under the indenture.

Our non-guarantor subsidiaries are separate and distinct legal entities and will have no obligation, contingent or otherwise, to pay any amounts due on these notes or the guarantees, or to make any funds available therefor, whether by dividend, distribution, loan or other payments.

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The following table presents summarized financial information for us and the subsidiary guarantors, on a combined basis, after elimination of (i) intercompany transactions and balances among us and the subsidiary guarantors, and (ii) equity in earnings from, and any investments in, any of our non-guarantor subsidiaries:

As of September 30, 2024 As of December 31, 2023

As of March 31, 2025 As of December 31, 2024

Real estate properties, net (1)

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Other liabilities 397,770 358,778

Nine Months Ended September 30, 2024

(1) Real estate properties, net as of September 30, 2024 includes $155,782 of properties owned directly by us and not included in the assets of the subsidiary guarantors.

Three Months Ended March 31, 2025

(1) Real estate properties, net as of March 31, 2025 includes $138,986 of properties owned directly by us and not included in the assets of the subsidiary guarantors.

(2) Intercompany balances represent payables to non-guarantor subsidiaries.

Related Person Transactions

We have relationships and historical and continuing transactions with RMR, RMR Inc., TA and Sonesta and others related to them.

We have relationships and historical and continuing transactions with RMR, RMR Inc.

and Sonesta and others related to them.

For further information about these and other such relationships and related person transactions, see Notes 6, 10 and 11 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, our 2024 Annual Report, our definitive Proxy Statement for our 2025 Annual Meeting of Shareholders and our other filings with the Securities and Exchange Commission, or SEC.

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Actual results could differ from those estimates.

Significant estimates in the condensed consolidated financial statements include consolidation of VIEs, purchase price allocations, the determination of useful lives of fixed assets, classification of leases, and the assessment of the carrying values and impairment of real estate intangible assets and equity investments.

Significant estimates in the condensed consolidated financial statements include consolidation of VIEs, purchase price allocations, the determination of useful lives of fixed assets, classification of leases, and the assessment of the book values and impairment of real estate intangible assets and equity investments.

A discussion of our critical accounting estimates is included in our 2024 Annual Report.

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Property and Operating Statistics (dollars in thousands, except hotel statistics)

As of September 30, 2024, we owned and managed a diverse portfolio of hotels and net lease properties across the United States and in Puerto Rico and Canada with 146 distinct brands across 22 industries.

As of March 31, 2025, we owned and managed a diverse portfolio of hotels and net lease properties across the United States and in Puerto Rico and Canada with 145 distinct brands across 22 industries.

Hotel Portfolio

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of Hotels Three Months Ended

September 30, Three Months Ended

September 30,

Brand 2024 2023 Change 2024 2023 Change 2024 2023 Change

Sonesta Hotels & Resorts® Full Service 22 7,205 60.5 % 68.2 % (7.7) pts $ 158.39 $ 155.17 2.1 % $ 95.87 $ 105.88 (9.5) %

Royal Sonesta Hotels® Full Service 17 5,663 67.5 % 62.3 % 5.2 pts 227.48 230.44 (1.3) % 153.49 143.47 7.0 %

Radisson® Hotels & Resorts Full Service 5 1,149 67.2 % 63.8 % 3.4 pts 148.21 148.87 (0.4) % 99.53 95.03 4.7 %

Crowne Plaza® Full Service 1 495 62.7 % 62.5 % 0.2 pts 141.21 142.56 (0.9) % 88.49 89.13 (0.7) %

Country Inn & Suites® by Radisson Full Service 2 346 78.3 % 76.5 % 1.8 pts 167.43 169.09 (1.0) % 131.05 129.38 1.3 %

Full Service Total/Average 47 14,858 64.2 % 65.6 % (1.4) pts 184.94 181.99 1.6 % 118.68 119.40 (0.6) %

Sonesta Select® Select Service 43 6,279 61.7 % 59.5 % 2.2 pts 118.31 121.95 (3.0) % 72.96 72.58 0.5 %

Hyatt Place® Select Service 17 2,107 70.4 % 70.8 % (0.4) pts 120.02 121.65 (1.3) % 84.50 86.13 (1.9) %

Select Service Total/Average 60 8,386 63.9 % 62.4 % 1.5 pts 118.79 121.86 (2.5) % 75.86 75.98 (0.2) %

Sonesta ES Suites® Extended Stay 56 7,167 71.5 % 73.1 % (1.6) pts 126.43 130.70 (3.3) % 90.39 95.56 (5.4) %

Sonesta Simply Suites® Extended Stay 50 6,366 74.7 % 72.1 % 2.6 pts 91.89 90.56 1.5 % 68.63 65.33 5.1 %

Extended Stay Total/Average 106 13,533 73.0 % 72.7 % 0.3 pts 109.80 111.97 (1.9) % 80.15 81.36 (1.5) %

Comparable Hotels Total/Average 213 36,777 67.3 % 67.5 % (0.2) pts $ 140.66 $ 141.52 (0.6) % $ 94.73 $ 95.47 (0.8) %

Comparable Hotels* No.

of Rooms or Suites Occupancy ADR RevPAR

Service Level No.

of Hotels Nine Months Ended

September 30, Nine Months Ended

September 30,

March 31, Three Months Ended

Brand 2025 2024 Change 2025 2024 Change 2025 2024 Change

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* We define comparable hotels as those that were owned by us and were open and operating for the entirety of the periods being compared.

For each of the three months ended September 30, 2024 and 2023, our comparable results exclude one hotel that suspended operations during the periods presented.

For each of the nine months ended September 30, 2024 and 2023, our comparable results exclude two hotels.

One of the hotels was not owned for the entirety of the periods presented and the other suspended operations during the periods presented.

For each of the three months ended March 31, 2025 and 2024, our comparable results exclude one hotel that suspended operations during the periods presented.

of Rooms or Suites Occupancy ADR RevPAR

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of Hotels Three Months Ended

September 30, Three Months Ended

September 30,

March 31, Three Months Ended

Brand 2025 2024 Change 2025 2024 Change 2025 2024 Change

Sonesta Hotels & Resorts® Full Service 22 7,205 60.5 % 68.2 % (7.7) pts $158.39 $155.17 2.1 % $ 95.87 $ 105.88 (9.5) %

Retained Hotels:

Royal Sonesta Hotels® Full Service 17 5,663 51.2 % 50.7 % 0.5 pts $246.16 $236.71 4.0 % $ 125.96 $ 120.10 4.9 %