| Schedule of revenues, significant hotel operating expenses, and Hotel Adjusted EBITDAre for the Company's hotels |
The following tables include revenues, significant hotel operating expenses, and Hotel Adjusted EBITDAre for the Company’s hotels, reconciled to the consolidated amounts included in the accompanying consolidated statements of operations, which the CODM uses to manage its business, such as how to allocate capital to its hotels and how to determine the Company’s acquisition and disposition strategies (in thousands): | | | | | | | | | | | | | | | Three Months Ended June 30, | | Six Months Ended June 30, | | | 2026 | | 2025 | | 2026 | | 2025 | Revenues | | | | | | | | | | | | | Total revenues | | $ | 277,109 | | $ | 259,772 | | $ | 536,818 | | $ | 493,837 | | | | | | | | | | | | | | Expenses | | | | | | | | | | | | | Room | | | 43,142 | | | 39,764 | | | 85,140 | | | 78,030 | Food and beverage | | | 54,097 | | | 52,123 | | | 105,369 | | | 100,014 | Other operating | | | 7,916 | | | 6,322 | | | 14,640 | | | 12,093 | Advertising and promotion | | | 14,561 | | | 13,672 | | | 28,253 | | | 26,173 | Repairs and maintenance | | | 10,285 | | | 9,712 | | | 19,866 | | | 19,249 | Utilities | | | 7,264 | | | 7,051 | | | 14,401 | | | 13,792 | Franchise costs | | | 4,960 | | | 4,843 | | | 9,545 | | | 9,302 | Property tax, ground lease and insurance | | | 20,841 | | | 19,161 | | | 40,986 | | | 38,190 | Other property-level expenses (1) | | | 33,886 | | | 31,216 | | | 66,644 | | | 60,314 | | | | 196,952 | | | 183,864 | | | 384,844 | | | 357,157 | | | | | | | | | | | | | | Hotel Adjusted EBITDAre | | $ | 80,157 | | $ | 75,908 | | $ | 151,974 | | $ | 136,680 |
| | | | | | | | | | | | | | | Three Months Ended June 30, | | Six Months Ended June 30, | | | 2026 | | 2025 | | 2026 | | 2025 | Reconciliation of Hotel Adjusted EBITDAre to Net Income | | | | | | | | | | | | | Hotel Adjusted EBITDAre | | $ | 80,157 | | $ | 75,908 | | $ | 151,974 | | $ | 136,680 | Non-hotel operating expenses, net (2) | | | (8) | | | 101 | | | (16) | | | 108 | Severe weather-related restoration expenses, net of insurance proceeds (3) | | | 18 | | | — | | | (2,055) | | | — | Property-level pre-opening and management transition costs (3) | | | (118) | | | (3,218) | | | (118) | | | (6,471) | Property-level legal settlement costs (3) | | | (935) | | | — | | | (935) | | | — | Taxes assessed on commercial rents (3) | | | (258) | | | (189) | | | (557) | | | (352) | Amortization of right-of-use assets and obligations | | | 6 | | | 295 | | | 4 | | | 583 | Corporate overhead | | | (8,760) | | | (8,346) | | | (15,595) | | | (17,251) | Depreciation and amortization | | | (34,260) | | | (34,125) | | | (68,437) | | | (66,400) | Impairment and other losses | | | (1,639) | | | — | | | (1,639) | | | — | Interest and other income | | | 3,791 | | | 2,300 | | | 5,324 | | | 3,864 | Interest expense | | | (11,782) | | | (13,164) | | | (23,059) | | | (25,846) | Loss on sale of assets | | | — | | | (8,751) | | | — | | | (8,751) | Income tax provision, net | | | (187) | | | (37) | | | (309) | | | (135) | Net income | | $ | 26,025 | | $ | 10,774 | | $ | 44,582 | | $ | 16,029 |
| (1) | Other property-level expenses include property-level general and administrative expenses, such as payroll, benefits, and other employee-related expenses, contract and professional fees, credit and collection expenses, employee recruitment, relocation and training expenses, labor dispute expenses, consulting fees, management fees, and other expenses. |
| (2) | Non-hotel operating expenses, net are included in property tax, ground lease and insurance on the accompanying consolidated statements of operations for the three and six months ended June 30, 2026 and 2025, and include corporate-level current year property taxes and insurance, as well as any prior year property taxes assessed on sold hotels, net of any refunds received. |
| (3) | When assessing a hotel’s operating performance, the CODM excludes certain items that are not indicative of the ongoing operating performance of the Company’s hotels, including severe weather-related restoration expenses, pre-opening expenses associated with extensive renovation projects, property-level management transition costs, legal settlement costs, and taxes assessed on commercial rents. |
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