The numbers will show negative comparisons to the previous year for RLJ Lodging Trust in its fourth-quarter and full-year 2025 results, but executives say its performance was better than expected thanks to the success of its hotels in urban markets and completed renovations.
RLJ President and CEO Leslie Hale said on the company's earnings call Friday that 2025 was a "highly productive year" for the Bethesda, Maryland-based real estate investment trust.
In 2025, RLJ completed renovations at two of its high-occupancy hotels in the Courtyard Waikiki Beach in Honolulu and Embassy Suites by Hilton Deerfield Beach Resort & Spa in Deerfield Beach, Florida. Both assets generated revenue per available room growth of more than 10% in December, Hale said.
The REIT also completed the conversion of the 21c Museum Hotel Nashville into The Bankers Alley Hotel, a Tapestry Collection by Hilton in the fourth quarter. RLJ remains on pace to deliver two conversions a year, with the next hotels in line the Renaissance Pittsburgh Hotel — which will change flags to Marriott International's Autograph Collection — and the Wyndham Boston Beacon Hill — which will change flags to Hilton's Tapestry Collection.
RLJ sold the Courtyard Atlanta Buckhead, Embassy Suites by Hilton Dallas-Love Field and Residence Inn Houston by the Galleria — now the Extended Stay America Suites – Houston – Galleria — for a total of $73.7 million in 2025. Chief Financial Officer Nikhil Bhalla said RLJ recycled the sale proceeds into the repurchase of 3.3 million shares for $28.6 million along with its refinancing efforts.
"We continue to make prudent capital allocation decisions to position our portfolio to drive growth through the entire cycle while maintaining a strong and flexible balance sheet," he said.
Fourth-quarter revenue per available room across RLJ's portfolio was down 1.5%, which was a higher mark than anticipated due to effects from the government shutdown, Hale said.
"These improved top-line results were driven by the relative outperformance of our urban markets, a stronger-than-expected acceleration of the ramp at our major renovations as the shutdown ended, as well as an overall stronger December, which benefited from positive leisure demand despite a difficult year-over-year comparison for the month," she said.
Non-government business transient revenues grew by 5% in the fourth quarter and benefit from healthy corporate profits in sectors such as tech, finance and consulting, Hale said.
Despite the government shutdown affecting revenues in the fourth quarter, Hale said RLJ executives remain encouraged by group-demand dynamics.
RLJ's portfolio has 92 hotels and about 21,000 rooms across 23 states, with a heavy presence in California, Florida and Texas.
Expectations for 2026
Hale said RLJ is "cautiously optimistic overall" looking into the future. There are risks present, but the positive trends from last year could gain momentum in 2026.
"While we acknowledge the lingering geopolitical uncertainty, we remain constructive on the setup of the broader economy, given the tailwinds expected from moderating interest rates and tax cuts, which have positive implications for travel demand," she said.
In its 2026 outlook, RLJ projects comparable RevPAR growth between 0.5% and 3% and adjusted earnings before interest, taxes, depreciation and amortization between $312 million and $342 million.
RLJ is set up to benefit from major events — such as the 2026 FIFA World Cup, America's 250th anniversary, the NFL draft, MLB All-Star Game and NCAA March Madness — heading to its urban markets this year, Hale said. Its hotels have a presence in nine of the 2026 FIFA World Cup host markets, including hosts of prominent matches such as New York City, Los Angeles and Miami.
"We believe these trends will disproportionately favor urban markets, allowing them to continue to outperform the broader industry," she said. "Against this backdrop, we believe we are well-positioned, given our favorable geographic exposure, urban footprint and high-impact capital investments, which should allow us to benefit from the broad-based growth across all of the segments that urban markets are capturing."
San Francisco was the top performer among its urban markets in 2025, achieving 52% RevPAR growth in the fourth quarter, Hale said. The success of the market is expected to continue into 2026.
"We are encouraged by the ongoing momentum in San Francisco's recovery, supported by a thriving tech economy, improving perception of the overall local environment and a strong lineup of events this year, including the recent Super Bowl — which was wildly successful — as well as the upcoming World Cup games," she said.
By the numbers
RLJ reported comparable RevPAR of $136.79 in the fourth quarter, a 1.5% decrease year over year, according to its earnings release. Comparable ADR was $199.20 in the quarter, down 0.7%, and comparable occupancy was 68.7%, down 0.9%.
Full-year comparable RevPAR was $143.49 in 2025, down 1.7% from 2024. Comparable ADR for the year was $200.39, a 0.3% decrease, and comparable occupancy was down 1.4% to 71.6%.
Adjusted earnings before interest, taxes, depreciation and amortization was $80.4 million in the fourth quarter, down 0.9% compared to the same quarter in 2024. For the year, adjusted EBITDA declined 7.5% to $334.6 million.
RLJ's net income for the fourth quarter was $500,000, down 90.9% year over year from $5.5 million. Net income for 2025 was $28.6 million, down 58.1% from $68.2 million in 2024.
As of press time, RLJ's stock was trading at $7.95 per share, down 15.9% year over year. The NYSE Composite Index was up 18.5% for the same period.