Overview of the Company’s Financial Performance

Ashford Hospitality Trust, Inc. (the “Company”) is a real estate investment trust (REIT) that primarily invests in upper upscale full-service hotel properties in the United States. As of December 31, 2025, the Company’s portfolio consisted of 67 consolidated operating hotel properties with 16,445 total rooms, as well as one additional consolidated operating hotel property owned through a 29.3% investment, representing 188 total rooms.

The Company’s financial performance in 2025 was mixed compared to the prior year. Total revenue decreased by $68.1 million, or 5.8%, to $1.1 billion in 2025 from $1.2 billion in 2024. This decline was primarily due to decreases in rooms revenue, food and beverage revenue, and other hotel revenue.

On the positive side, the Company’s operating expenses decreased by $47.1 million, or 5.8%, to $768.3 million in 2025 compared to $815.4 million in 2024. This was driven by lower direct expenses and indirect expenses/management fees. The Company also recorded lower depreciation and amortization, advisory service fees, and corporate/general administrative expenses.

However, the Company reported a net loss of $179.8 million in 2025, compared to a net loss of $60.3 million in 2024. This was largely due to impairment charges of $67.6 million, a decrease in gains on asset sales and derecognition, and higher interest expense. The Company also had to suspend preferred stock dividends to preserve liquidity.

Revenue and Profit Trends

The Company’s key performance indicators showed mixed results in 2025 compared to 2024. RevPAR (revenue per available room) decreased slightly from $132.87 in 2024 to $131.68 in 2025, driven by a 1.3% increase in average daily rate (ADR) offset by a 163 basis point decrease in occupancy. Occupancy for the Company’s comparable hotel properties was 69.50% in 2025 compared to 71.13% in 2024.

Rooms revenue decreased by $64.1 million, or 7.2%, to $825.6 million in 2025. This was primarily due to decreases from hotel dispositions, the KEYS A and B properties in receivership, and the Company’s comparable hotel properties. Food and beverage revenue also declined by $5.0 million, or 2.3%, to $207.6 million.

On the expense side, hotel operating expenses decreased by $47.1 million, or 5.8%, to $768.3 million. This was driven by lower direct expenses from the hotel dispositions and KEYS properties, as well as lower indirect expenses and management fees. Property taxes, insurance and other expenses also decreased by $4.3 million, or 6.7%, to $59.8 million.

However, the Company recorded significant impairment charges of $67.6 million in 2025, up from $59.3 million in 2024. These charges were related to several hotel properties, including the Hilton Alexandria Old Town, New Orleans Le Pavillon Hotel, and Hilton Santa Cruz Scotts Valley.

Overall, the Company’s profitability declined in 2025, with Adjusted FFO (a non-GAAP measure of operating performance) decreasing from a loss of $23.1 million in 2024 to a loss of $34.4 million in 2025.

Strengths and Weaknesses

One of the Company’s key strengths is its diversified portfolio of upper upscale full-service hotel properties located across the United States. This provides some geographic diversification, though the Company’s hotels are still concentrated in certain markets.

Another strength is the Company’s focus on cost control, as evidenced by the reduction in operating expenses in 2025. The Company was able to lower direct expenses, indirect expenses, and management fees, which helped offset the decline in revenue.

However, the Company’s financial performance has been hampered by several factors, including:

1. Impairment charges: The Company has had to record significant impairment charges in both 2025 and 2024, indicating potential issues with the underlying value of some hotel properties.

2. Debt maturities and refinancing challenges: The Company has $1.9 billion in non-recourse loans maturing within one year, and it is uncertain whether the Company will be able to refinance these loans on favorable terms. This poses a significant liquidity risk.

3. Suspension of preferred stock dividends: The Company was forced to suspend preferred stock dividends in 2026 to preserve liquidity, which could negatively impact the Company’s access to capital markets.

4. Declining operating performance: The Company’s key performance indicators, such as RevPAR and occupancy, have shown declines, indicating challenges in the underlying hotel operations.

Outlook and Future Prospects

The Company’s outlook is uncertain, as it faces significant near-term liquidity challenges due to upcoming debt maturities and the potential triggering of a change-of-control provision in its advisory agreement, which could result in a substantial termination fee.

The Company is taking steps to reduce cash utilization and potentially raise additional capital, such as through the sale of hotel properties. However, the Company has acknowledged that there is substantial doubt about its ability to continue as a going concern within the next year, as it cannot rely on future potential fundraising activities or asset sales that have not been fully implemented.

The Company’s ability to improve its financial position and return to profitability will depend on its success in refinancing or extending its debt maturities, reducing operating expenses, and potentially divesting non-core hotel properties. The Company’s board of directors has also formed a special committee to evaluate strategic alternatives aimed at creating and enhancing stockholder value.

Overall, the Company’s financial performance in 2025 was mixed, with declines in revenue and profitability, but also some success in controlling expenses. However, the Company faces significant near-term liquidity challenges and an uncertain outlook, which will require decisive action and strategic decision-making to address.