v3.26.1
Segment Reporting
 3 Months Ended
Mar. 31, 2026
Segment Reporting [Abstract]  
Segment Reporting Segment Reporting
We operate in one reportable business segment within the hotel lodging industry: direct hotel investments. Direct hotel investments refer to owning hotel properties through either acquisition or new development. We report operating results of direct hotel investments on an aggregate basis as substantially all of our hotel investments: (i) offer similar products and services to their customers in the form of hotel rooms, food and beverage, and ancillary services; (ii) utilize third-party hotel management companies to deliver its products and services to its customers; (iii) are designed and operated to appeal to similar individuals, groups, leisure and business customers; and (iv) have third-party hotel managers that utilize the same methods (direct hotel sales and various online booking portals) to distribute the Company’s products and services. As of March 31, 2026 and 2025, all of our hotel properties were in the U.S. and its territories. The Company’s chief operating decision maker (“CODM”) is its President and Chief Executive Officer.
Each hotel property derives revenue primarily from guestroom sales, food and beverage sales and revenues from other lodging services and amenities. The accounting policies of each operating segment are the same as those described in the summary of significant accounting policies in note 2.
The CODM reviews and makes decisions on all aspects of the Company’s business using all available financial and non-financial data for each hotel individually. Capital allocation decisions to acquire, sell, enhance, redevelop or perform renewal and replacement expenditures are determined on a hotel-by-hotel basis. Specifically, the CODM reviews the results of each hotel to assess the hotel’s profitability. The key measure the CODM uses to allocate resources and assess performance is individual hotel net income (loss) before interest expense, income taxes, depreciation and amortization, adjusted to exclude certain items determined by management to not be reflective of its ongoing operating performance or incurred in the normal course of business (“Hotel Adjusted EBITDA”). The adjustments include gains and losses on hotel dispositions, impairment charges, pre-opening costs associated with extensive renovation projects, property-level legal settlements, restructuring, severance, management transition costs and other expenses identified by management as non-recurring. The CODM does not regularly review asset information by segment.
Following Stirling OP’s redemption of its unit holders on September 2, 2025, the Company updated the presentation of its reportable segment for March 31, 2026 and 2025, to incorporate the results of Stirling OP’s four hotel properties. Prior to September 2, 2025, the CODM did not regularly review the results of Stirling OP. The following tables include revenues, significant hotel operating expenses, and Hotel Adjusted EBITDA for the Company’s hotels, reconciled to the consolidated amounts included in the Company’s consolidated statements of operations (in thousands):
Three Months Ended March 31,
20262025
REVENUE
Rooms$200,025 $206,301 
Food and beverage51,570 54,529 
Other hotel revenue15,983 16,220 
Total hotel revenue267,578 277,050 
EXPENSES
Rooms46,190 47,790 
Food and beverage34,300 35,726 
Direct expenses2,053 2,193 
Indirect expenses:
Property, general and administration
23,642 24,841 
Sales and marketing27,549 28,970 
Information and telecommunications systems4,301 4,718 
Repairs and maintenance12,488 13,389 
Energy10,408 10,125 
Lease expense1,168 1,263 
Ownership expenses584 589 
Incentive management fee4,189 3,666 
Management fees9,184 9,578 
Property taxes9,154 10,094 
Other taxes (refunds)
120 119 
Insurance5,443 5,516 
Total expenses
190,773 198,577 
Hotel adjusted EBITDA$76,805 $78,473 
Three Months Ended March 31,
20262025
Reconciliation of hotel adjusted EBITDA to net income (loss)
Hotel adjusted EBITDA$76,805 $78,473 
Other revenue154 309 
Ownership expenses included in food and beverage expense(83)— 
Ownership expenses included in other hotel expenses (4,891)(5,356)
Ownership expenses included in property taxes, insurance and other(177)(320)
Management fees (100)(270)
Depreciation and amortization(32,006)(37,339)
Impairment charges
(112,649)— 
Advisory services fee
(20,023)(11,545)
Corporate, general, and administrative
(1,602)(4,332)
Gain (loss) on disposition of assets and hotel properties
100,030 31,868 
Gain (loss) on derecognition of assets
7,790 10,046 
Equity in earnings (loss) of unconsolidated entities
(202)(431)
Interest income922 1,214 
Other income (expense), net3,223 — 
Interest expense and amortization of discounts and loan costs
(73,554)(66,802)
Interest expense associated with hotels in receivership(7,820)(10,046)
Write-off of premiums, loan costs and exit fees(1,254)(4,597)
Gain (loss) on extinguishment of debt(25)(13)
Realized and unrealized gain (loss) on derivatives757 (2,740)
Income tax (expense) benefit(752)(317)
Net income (loss)$(65,457)$(22,198)
The following table reconciles segment total revenue to total consolidated revenue:
Three Months Ended March 31,
20262025
Consolidated total hotel revenue
$267,578 $277,050 
Other revenue
154 309 
Total consolidated revenue
$267,732 $277,359