RLJ Lodging Trust Sees 1.5% Q4 RevPAR Decline, Pegs 45bps World Cup Lift
RLJ Lodging Trust recorded a 1.5% RevPAR drop in Q4 2025 and projects 85 basis points of 2026 growth split between a 45 basis-point World Cup lift and 40 basis points from renovated properties. It forecasts 3% expense growth and plans two annual conversions after 15% RevPAR gains.
1. Q4 RevPAR Performance and Drivers
RLJ Lodging Trust reported a 1.5% RevPAR decline in Q4 2025 driven by decreases in both occupancy and average daily rate. Management expects 2026 RevPAR growth equally weighted between rate and occupancy, including a 45 basis-point lift from World Cup demand and 40 basis points from high-occupancy renovations.
2. 2026 Cost and Margin Outlook
The company forecasts overall expense growth of 3% in 2026 with variable expenses rising 2% and fixed expenses up 4%, excluding tax benefits. Wage and benefits costs are expected to increase 3–4% as part of efforts to maintain stable EBITDA margins.
3. Capital Allocation Strategy
RLJ plans to balance near-term asset sales with share repurchases, recycling proceeds into higher-return opportunities throughout 2026. Management emphasizes maintaining a strong balance sheet while using buybacks to drive shareholder value.
4. Conversion and Renovation Plans
The trust aims to complete two property conversions per year, with ongoing projects including Boston’s conversion to Hilton’s Tapestry Collection and Pittsburgh’s to Marriott’s Autograph Collection. Recent conversions have delivered approximately 15% RevPAR growth, underpinning the company’s strategy.