RLJ Lodging Trust (RLJ) Sidoti Small-Cap Virtual Investor Conference summary

Industry backdrop and demand trends

• Lodging industry RevPAR up nearly 5% through May, with strong performance driven by both occupancy and rate growth.

• Supply growth in the industry is at a historic low of 0.5%, supporting favorable fundamentals for several years.

• Urban markets show even lower supply growth and robust demand, especially from business and urban leisure travel.

• Business travel demand is accelerating, up 10% in Q1 and 11% in April, supported by AI and manufacturing investments.

• Urban leisure is also growing, with consumer spend on experiences rising and urban leisure revenue up 4.3% in 2024.

Portfolio positioning and event-driven growth

• Portfolio is concentrated in urban, heart-of-demand locations, benefiting from both business and leisure demand.

• Major events like the World Cup, Super Bowl, and 250th anniversary of America are expected to drive significant demand in key markets.

• 30%-35% of the portfolio will benefit directly from World Cup matches, with 62% of games in portfolio markets.

• Strategic asset positioning in cities like New York, Boston, LA, and San Francisco maximizes rate and occupancy during major events.

• Northern California, with 11% portfolio exposure, is rebounding due to AI investment and convention activity.

Investment thesis and operational strategy

• Focus on efficient, mid-sized hotels (100-300 rooms) with 80%+ revenue from room sales, driving high margins (27%-30%).

• Affiliation with top brands (Marriott, Hilton, Hyatt) leverages loyalty programs and higher RevPAR indices.

• Portfolio shift toward lifestyle and boutique hotels to capture evolving consumer preferences.

• Geographic diversification across bi-coastal and Sun Belt markets supports resilience and growth.

• Internal CapEx team enables efficient execution of value-add projects and conversions.