RLJ Lodging Trust (RLJ) Q1 2026 Earnings Call Transcript – Image for illustrative purposes only (Image credits: Unsplash)
Bethesda, Md. – RLJ Lodging Trust delivered first-quarter 2026 results that surpassed expectations, propelled by a 4.8 percent increase in comparable revenue per available room.[1][2] The company, a real estate investment trust specializing in upscale hotels, reported total revenue of $340 million during the period ended March 31. Executives emphasized persistent demand from business travelers and leisure guests in key urban markets during Monday’s earnings conference call.
Key Financial Metrics Show Gains Across Core Areas
Comparable hotel revenue reached $340 million, marking a 5.4 percent rise from the year-ago quarter.[1] Adjusted funds from operations per diluted share and unit climbed 6.5 percent to $0.33, while comparable hotel EBITDA expanded 7.2 percent to $89.9 million. Margins improved slightly to 26.4 percent, up 45 basis points.
The portfolio achieved occupancy of 70.8 percent, a 2.6 percentage point improvement, paired with an average daily rate of $209.91, up 2.1 percent. Non-room revenues grew faster at 8.2 percent, fueled by food and beverage as well as parking initiatives. Despite a modest net loss of $0.3 million, these figures reflected effective expense management and renovation benefits.[2]
| Metric | Q1 2026 | YoY Change |
|---|---|---|
| Comparable RevPAR | $148.55 | +4.8% |
| Comparable Hotel Revenue | $340.0M | +5.4% |
| Comparable Hotel EBITDA | $89.9M | +7.2% |
| Adjusted FFO per Share | $0.33 | +6.5% |
Urban Markets and Renovations Drive Outperformance
Urban properties led the way with RevPAR growth of 4.4 percent, outpacing comparable markets by 110 basis points. Business transient revenue increased 9 percent on a 7 percentage point rise in room nights, while leisure demand rose 5 percent on higher rates. Group bookings paced up 900 basis points, with corporate mix exceeding 50 percent and ADR up 3 percent.[2]
Recently completed renovations and conversions contributed meaningfully. Four high-occupancy renovations delivered 9 percent RevPAR growth and 10 percent EBITDA uplift. Seven conversions boosted EBITDA 16 percent and total revenue 8 percent. Standout regions included Northern California at plus 27 percent, South Florida at 10 percent, and Houston and Denver each at 14 percent. New York City exceeded 8 percent growth.
President and CEO Leslie D. Hale noted, “We are pleased with our strong first quarter results, which exceeded our expectations, driven by improving fundamentals, strong performance in a number of our top Urban markets, and the continued ramp of our recently completed, high-impact renovations and conversions.”Press release
Refinancing Bolsters Balance Sheet Liquidity
RLJ maintained robust liquidity exceeding $950 million, including $353.1 million in unrestricted cash and $600 million available on its revolver. Total debt stood near $2.2 billion at a 4.6 percent average rate, with 75 percent fixed or hedged and a weighted average maturity over four years.
The company addressed all debt maturities through 2028 via strategic refinancings. These included extending the revolver, upsizing a term loan, adding a new term loan, and refinancing mortgages. Proceeds from an incremental term loan repaid $500 million in senior notes due in July 2026, pushing the next maturity to 2029. The board declared a quarterly dividend of $0.15 per common share, payable April 15 to shareholders of record March 31.[1]
Raised Guidance Signals Optimism for 2026
Executives raised full-year 2026 guidance to reflect first-quarter strength and favorable trends. Comparable RevPAR now targets 1.5 percent to 3.5 percent growth. Comparable hotel EBITDA guidance moved to $356 million to $380 million, with corporate adjusted EBITDA at $324 million to $348 million. Adjusted FFO per diluted share ranges from $1.29 to $1.45.
- Net interest expense: $101 million to $103 million
- Cash G&A: $32.5 million to $33.5 million
- Renovation CapEx: $80 million to $90 million
- Diluted shares/units: 150.8 million
Guidance assumes no new acquisitions, dispositions, or major balance sheet changes. Second-quarter adjusted EBITDA may dip slightly below prior-year levels due to the first-quarter surge rather than weakening fundamentals. Hale added, “While the evolving geopolitical environment has added a layer of uncertainty, we continue to be encouraged by the healthy demand trends we are seeing.”[1]
RLJ positions for tailwinds like the FIFA World Cup and the U.S. 250th anniversary, favoring its urban-heavy portfolio.