RLJ Lodging Trust Q4 FY2024 earnings call

• 2024 Achievements: Top quartile RevPAR growth, outpaced industry; acquired Hotel Teatro in Denver; completed 6 conversions with over 10% RevPAR growth in 2024; advanced pipeline conversions in Nashville and Boston; addressed 2025 debt maturities; recycled proceeds into share repurchases; increased quarterly dividend. - Q4 Operating Performance: RevPAR 2.2% growth, driven by 2.5% ADR increase, 0.2% occupancy decline. Urban markets strong, November and December positive, January RevPAR 3.2% growth. BT, group, and leisure segments performed well. - Capital Allocation: Relaunched former Wyndham Pittsburgh, completed conversion ahead of schedule; advanced Nashville and Boston conversions; ramping conversions in multiple cities; utilized balance sheet for flexibility, addressed debt maturities, repurchased shares, increased dividend.

RevPAR grew by 2.2% over the prior year. Urban markets (two-thirds of portfolio) achieved 3.7% RevPAR growth in Q4; urban lifestyle hotels (40% of portfolio) had 4.5% RevPAR growth. BT segment achieved 8% revenue growth, 7% ADR increase. Group segment revenues grew 3%, 1% demand improvement, 2% ADR increase. Leisure segment revenues grew 6%, urban leisure at 8%. Out-of-room spend robust growth of 6.3%, total revenues grew 3%.

• 2025 Outlook: Comparable RevPAR growth 1%-3%; hotel EBITDA $378M-$408M; corporate adjusted EBITDA $345M-$375M; adjusted FFO per diluted share $1.46-$1.66. Expect quarterly seasonal patterns similar to 2024; first-quarter adjusted EBITDA $74M-$77M. Anticipate transaction market improvement, but remain disciplined.

• Market Volatility: Headline volatility may persist. - Renovations Impact: Potential displacement from scheduled 2025 renovations in certain markets. - Transaction Market Uncertainty: Bid-ask spread wide, transaction market choppy. - Fire Impact: Uncertainty on long-term demand impact from events like LA fires.

Q: On 1%-3% RevPAR guidance, unpack high end and low end, risks/headwinds.

A: High end assumes macro steady, BT ahead, group stronger; low end assumes BT slower, group rate less. Risks include urban leisure softening, renovation displacement.

Q: Capital allocation priorities, stack ranking for 2025.

A: Nimble, evaluate windows, balance sheet provides optionality; continue buybacks, investments in conversions, dividend.

Q: Conversions cadence, potential acceleration.

A: Cadence of 2-3 conversions per year, right balance of capex and contracts; incremental growth catalysts through conversions.

Q: Transaction market, buyer/seller expectations.

A: Market choppy, bid-ask spread wide; small deals done, remain opportunistic, balance sheet allows flexibility.

Q: LA fires impact on hotels, expectations for rest of year.

A: LA markets benefited from fire relief, budgets not built on fire impact; improvement in conditions, not baked into broader numbers.

Q: Urban leisure vs resort leisure demand/rate.

A: Urban leisure outperforms, favorable setup for special events; San Diego lease negotiation moving favorably.

Q: Conversions stabilized returns, urban portfolio occupancy vs 2019.

A: Unlevered IRRs north of 50%; urban portfolio occupancy 94% of 2019 levels, BT and group around 90%.

Q: January commentary, market run rate.

A: January had multiple strong markets; expect every quarter positive, first quarter better than second, second half better than first.

Q: Brand companies, New York market recovery.

A: Transaction market choppy, no immediate brand sale; New York market strong, but not right time for brand sale.

Q: BT rates vs group, Bay Area outlook.

A: BT rates 15% below group, broad-based; Bay Area expected above midpoint of guidance, benefits from return to office, corporate conferences.