Performance in 2025 was primarily driven by a 12.8% increase in group room revenue, which catalyzed significant high-margin ancillary spending in food, beverage, and banquet services.
The successful up-branding of Grand Hyatt Scottsdale served as a major growth engine, with RevPAR increasing over 104% as the property ramped up following its transformative renovation.
Management executed a strategy of continuous portfolio refinement by divesting Fairmont Dallas to avoid $80 million in future capital expenditures while acquiring land under Hyatt Regency Santa Clara to eliminate lease uncertainty.
Operational efficiency improved through corporate initiatives targeting real estate taxes, insurance, and infrastructure ROI projects, resulting in a 129 basis point expansion in hotel EBITDA margins for the full year.
Market-specific dynamics showed strength in Scottsdale, Orlando, and Northern California, while Texas and San Diego faced headwinds from softer citywide convention calendars and difficult year-over-year comparisons.
The company prioritized capital allocation toward share repurchases, buying back 9.2% of outstanding shares in 2025 at what management considers a meaningful discount to Net Asset Value.
Management projects 7% growth in adjusted FFO per share for 2026, supported by the continued ramp-up of Grand Hyatt Scottsdale and a robust group booking pace.
Guidance assumes a 3% midpoint for same-property RevPAR growth, with approximately 75 basis points of that growth attributed to one-time events like the FIFA World Cup, the NFL Draft, and America 250.
Group revenue pace for the remainder of 2026 is up 10% as of late January, with 70% of the full-year group business already considered definite.
The supply outlook is characterized as the most favorable in the company’s history, with approximately half of the portfolio’s rooms located in market tracks with zero expected new hotel supply through 2027.
Expense management remains a focus as wages and benefits are projected to grow 6%, though management expects this to be partially offset by moderating growth in indirect and utility costs.
A major food and beverage relaunch at W Nashville in partnership with Jose Andres Group is expected to add $3 million to $5 million in stabilized EBITDA by repositioning the hotel as a destination for locals and travelers.
The company faces an $11 million EBITDA headwind in 2026 due to the loss of income from the Fairmont Dallas sale, non-recurring tax refunds in 2025, lower projected interest income, and expected renovation disruption.
Planned capital expenditures of $70 million to $80 million for 2026 include guest room renovations at Andaz Napa and Ritz-Carlton Denver, scheduled for late in the year to minimize operational disruption.
The balance sheet was further de-risked by paying off the $52 million mortgage on Grand Bohemian Orlando, leaving 28 of 30 hotels unencumbered by property-level debt.
finance.yahoo.com
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