Q2 2026 Service Properties Trust Earnings Call Transcript

Aug 6, 2026 / 02:00 PM GMT

Release Date Price: $8.45 (+7.23%)

Transcript 10-Q8-K

Key Points

Positve

Service Properties Trust (SVC) reported a 6.6% year-over-year RevPAR increase in its retained hotel portfolio, outperforming the industry benchmark for the seventh consecutive quarter.
The company is making significant progress on its strategic priorities, including selling 20 properties for approximately $32 million and using proceeds to reduce debt and annual interest expense.
Net lease portfolio delivered steady NOI growth with a 2.2% increase in cash basis NOI quarter-over-quarter, driven by acquisitions, contractual rent growth, and reduced credit reserves.
Travel center rent coverage improved for the second straight quarter, increasing 10 basis points to 1.34 times, reflecting a 12% increase since Q4 2025.
The company is on track to complete the sale of its 15 exit hotels, which will eliminate approximately $15 million of negative EBITDA drag and improve overall portfolio profitability.
Service Properties Trust (SVC) successfully raised $542 million in net proceeds from an equity offering and redeemed $550 million of unsecured debt, resulting in $30 million in annual cash interest savings.

Negative

Normalized FFO decreased by $2.6 million or 4.5% year-over-year, primarily due to a $20 million decline in hotel results from disposition activity.
Gross operating profit margin percentage declined by 60 basis points to 28.7% for comparable hotels, driven by higher insurance costs and renovation-related displacement.
The Nautilus South Beach renovation project continues to be a significant drag on results, with an expected full-year cash drag of approximately $4.5 million.
The company faces execution risk in completing the remaining hotel dispositions, with one property still being marketed and potential timing extending into early 2027.
Hotel EBITDA for the retained portfolio increased only 4.2% in Q2, with the company acknowledging that margin improvement initiatives are still in early stages and will take time to materialize.
The company's hotel portfolio faces seasonality headwinds in the back half of August and Q4, which could impact RevPAR growth in the second half of the year.

Refinitiv StreetEvents Event Transcript
E D I T E D V E R S I O N

SVC.OQ - Service Properties Trust
Q2 2026 Service Properties Trust Earnings Call
Aug 06, 2026 / 02:00PM GMT

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Presentation
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Unidentified_1 [1]
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Good day and welcome to the Service Properties Trust second quarter 2026 earnings conference call.

All participants will be in listen-only mode.

Should you need assistance, please follow it.

After today's presentation, there will be an opportunity to ask questions.

To ask a question, you may press star, then 1 on your telephone keypad.

To withdraw your question, please press star then too.

Please note this event is being recorded.

I would now like to hand the call over to Kevin Barry, senior Director of Investor Relations.

Please go ahead.

Good morning thank you for joining us today.

With me on the call are Chris Bellotto,

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