v3.26.1
Segment Reporting
 6 Months Ended
Jun. 30, 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 June 30, 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 the three and six months ended June 30, 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 June 30,Six Months Ended June 30,
2026202520262025
REVENUE
Rooms$209,618 $227,203 $409,643 $433,504 
Food and beverage47,007 55,336 98,577 109,865 
Other hotel revenue16,442 19,006 32,425 35,226 
Total hotel revenue273,067 301,545 540,645 578,595 
EXPENSES
Rooms46,032 51,659 92,222 99,449 
Food and beverage31,106 35,455 65,406 71,181 
Direct expenses2,003 2,430 4,056 4,623 
Indirect expenses:
Property, general and administration
22,765 27,611 46,407 52,452 
Sales and marketing27,849 31,670 55,398 60,640 
Information and telecommunications systems4,229 3,485 8,530 8,203 
Repairs and maintenance12,258 13,508 24,746 26,897 
Energy9,141 10,560 19,549 20,685 
Lease expense1,094 1,133 2,262 2,396 
Ownership expenses459 556 1,043 1,145 
Incentive management fee5,368 5,213 9,557 8,879 
Management fees9,321 10,272 18,505 19,850 
Property taxes7,978 9,968 17,132 20,062 
Other taxes (refunds)
131 207 251 326 
Insurance4,982 5,539 10,425 11,055 
Total expenses
184,716 209,266 375,489 407,843 
Hotel adjusted EBITDA$88,351 $92,279 $165,156 $170,752 
Three Months Ended June 30,Six Months Ended June 30,
2026202520262025
Reconciliation of hotel adjusted EBITDA to net income (loss)
Hotel adjusted EBITDA$88,351 $92,279 $165,156 $170,752 
Other revenue173 456 327 765 
Ownership expenses included in food and beverage expense(82)— (165)— 
Ownership expenses included in other hotel expenses (4,729)(5,206)(9,620)(10,562)
Ownership expenses included in property taxes, insurance and other(88)(520)(265)(840)
Management fees (19)(72)(119)(342)
Depreciation and amortization(28,628)(35,276)(60,634)(72,615)
Impairment charges
— (1,447)(112,649)(1,447)
Advisory services fee
(14,199)(12,017)(34,222)(23,562)
Corporate, general, and administrative
(1,325)(5,485)(2,927)(9,817)
Gain (loss) on disposition of assets and hotel properties
150,046 6,684 250,076 38,552 
Gain (loss) on derecognition of assets
6,828 9,900 14,618 19,946 
Equity in earnings (loss) of unconsolidated entities
47 44 (155)(387)
Interest income1,047 1,253 1,969 2,467 
Other income (expense), net— — 3,223 — 
Interest expense and amortization of discounts and loan costs
(55,670)(70,135)(129,224)(136,591)
Interest expense associated with hotels in receivership(7,607)(10,454)(15,427)(20,846)
Write-off of premiums, loan costs and exit fees(305)(1,486)(1,559)(6,083)
Gain (loss) on extinguishment of debt(1,950)(2)(1,975)(15)
Realized and unrealized gain (loss) on derivatives44 (836)801 (3,576)
Income tax (expense) benefit(2,553)(119)(3,305)(436)
Net income (loss)$129,381 $(32,439)$63,924 $(54,637)
The following table reconciles segment total revenue to total consolidated revenue:
Three Months Ended June 30,Six Months Ended June 30,
2026202520262025
Consolidated total hotel revenue
$273,067 $301,545 $540,645 $578,595 
Other revenue
173 456 327 765 
Total consolidated revenue
$273,240 $302,001 $540,972 $579,360