Service Properties Trust (SVC) Q2 2026 earnings summary

Executive summary

• Achieved Normalized FFO of $55.0 million ($0.43/share) and Adjusted EBITDAre of $145.8 million for Q2 2026, with a net loss of $223.8 million due to $189.1 million asset impairment on hotels held for sale.

• Owns a diversified portfolio of 745 net lease properties and 93 hotels across the U.S., Puerto Rico, and Canada as of June 30, 2026, focusing on reducing debt and improving retained hotel performance.

• Net lease portfolio Cash Basis NOI grew 2.2% year-over-year; retained hotels RevPAR up 6.6% and hotel EBITDA up 4.2% year-over-year, reflecting benefits from renovations.

• Sold 20 properties for $31.6 million since Q2 start, including 19 retail net lease properties and one hotel; under contract to sell 13 hotels for $98.4 million.

• Raised $541.8 million in a public share offering, redeemed $550 million of senior notes, and currently have no borrowings under $650 million revolving credit facility.

Financial highlights

• Q2 2026 total revenues: $420.97 million, down 16.4% year-over-year, primarily due to hotel sales; net loss: $223.8 million ($1.75/share); Normalized FFO: $55.0 million ($0.43/share); Adjusted EBITDAre: $145.8 million.

• Net lease NOI: $94.9 million, up 1.4% year-over-year; net lease occupancy: 96.6%; rent coverage: 2.09x.

• Hotel RevPAR for retained hotels: $134.53, up 6.6% year-over-year; adjusted hotel EBITDA: $56.9 million, up 4.2% year-over-year.

• Gross operating profit margin for comparable hotels declined 60 bps to 28.7%.

• Cash flow available for distribution was $42.5 million for the quarter.

Outlook and guidance

• Full-year Normalized FFO guidance reaffirmed at $124–$144 million ($1.20–$1.35/share), assuming 105 million weighted average shares; Adjusted EBITDAre guidance: $500–$520 million.

• Hotel EBITDA guidance: $124–$144 million; net lease NOI: $380–$386 million; capital expenditures: $120–$140 million.

• Management expects continued pressure from inflation, labor costs, and macroeconomic uncertainty, which may impact hotel operations and tenant performance.

• Pending sales of 12–13 hotels for $77.4–$98.4 million and additional net lease acquisitions are expected.

• Positive momentum in hotel RevPAR carried into Q3, with preliminary July RevPAR up 7.1% year-over-year for retained hotels.