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Service Properties Trust (SVC) investor relations material

Service Properties Trust Q2 2025 earnings summary

Complete event summary combining all related documents: earnings call transcript, report, and slide presentation.
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Q2 2025 earnings summary6 Aug, 2025

Executive summary

  • Second quarter results aligned with expectations, advancing strategic priorities including hotel dispositions and net lease acquisitions as part of a transformation to a predominantly net lease REIT.

  • Owned 942 properties as of June 30, 2025, including 200 hotels and 742 net lease properties across 46 states, D.C., Canada, and Puerto Rico.

  • Strategy focused on debt reduction, net lease portfolio growth, and improving retained hotel performance.

  • Disposed of 8 hotels and entered agreements to sell 114 more, shifting portfolio toward service-focused retail net lease properties.

  • Amended management agreements with Sonesta for 59 retained hotels, aligning terms with market standards.

Financial highlights

  • Normalized FFO for Q2 2025 was $57.6M ($0.35/share), down from $0.45/share year-over-year.

  • Adjusted EBITDAre declined $7.7M year-over-year to $163.8M, mainly due to higher interest expense and lower hotel returns.

  • Q2 2025 total revenues $503.4M, down 1.9% year-over-year; net loss $38.2M, improved from $73.9M loss in Q2 2024.

  • Hotel-level EBITDA fell 11.3% to $73M; retained hotels' adjusted hotel EBITDA was $53.5M, down 11.7% year-over-year.

  • Distributions declared per share were $0.01 for Q2 and $0.02 for the first half of 2025.

Outlook and guidance

  • Q3 2025 guidance: RevPAR expected at $98–$101, adjusted hotel EBITDA projected at $54M–$58M, reflecting seasonality and industry headwinds.

  • Expect to complete pending hotel and net lease property sales in the second half of 2025, using proceeds to repay debt.

  • 2026 capital expenditure guidance set at $150M, with $64M for discretionary renovations and the remainder for maintenance.

  • Ongoing capital recycling and deleveraging strategy to continue into 2026, with further hotel dispositions planned.

  • Focus remains on maintaining liquidity, reducing leverage, and enhancing net lease portfolio stability.

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Frequently asked questions

Service Properties Trust is a real estate investment trust (REIT) that owns hotels and service-focused retail properties. The company leases its properties to hotel operators under management agreements and to retail tenants across the United States, Canada, and Puerto Rico. Its portfolio includes diverse hospitality and retail assets targeting stable cash flows and long-term lease agreements. Service Properties Trust is headquartered in Newton, Massachusetts, and its shares are listed on the NASDAQ.

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