Portsmouth Square Reports $5.414 Million Net Loss, Revenue Increases by 20% in Fiscal Year Ending June 30, 2026

Portsmouth Square, Inc. reported a net loss of $5.414 million for the fiscal year ending June 30, 2026, a significant improvement from the net loss of $9.110 million recorded in the previous fiscal year. The company's total revenue increased by approximately 20% to $55.797 million, up from $46.363 million in fiscal 2025. This growth was primarily driven by higher room revenue, which rose to $48.396 million from $39.648 million, reflecting improved business travel and convention demand, as well as the addition of 14 new guest rooms to the Hilton San Francisco Financial District, which increased the total room inventory to 558.

The company's operational performance showed marked improvement, with hotel operations segment income rising to $12.524 million from $8.732 million in the prior year. Average daily room rates increased by 16% to $253, while average occupancy rates improved to 95% from 92%. However, hotel operating expenses also rose, totaling $43.273 million compared to $37.631 million in fiscal 2025, largely due to increased salaries, marketing fees, and other operational costs associated with higher business volume.

Strategically, Portsmouth Square has maintained its franchise agreement with Hilton through January 31, 2030, and continues to operate under a management agreement with Aimbridge Hospitality. The company has also extended its unsecured revolving credit facility with its majority shareholder, The InterGroup Corporation, to July 31, 2029, providing additional liquidity. As of June 30, 2026, Portsmouth Square had cash and cash equivalents of $4.982 million and restricted cash of $8.440 million, indicating a stable liquidity position.

The company’s employee count stood at 191 as of June 30, 2026, with approximately 90% of hotel employees represented by labor unions under collective bargaining agreements. The company is currently facing challenges related to the removal of a pedestrian bridge that connected the hotel to Portsmouth Square, which was completed in August 2026. The company is responsible for the design and construction of permanent improvements to the hotel’s entrance following this removal.

Looking ahead, Portsmouth Square's management remains optimistic about future performance, expecting to meet liquidity requirements through cash on hand and improved hotel operations. The company anticipates that the ongoing recovery in business travel and conventions will continue to bolster its financial results, although it remains sensitive to local economic conditions and competition in the San Francisco lodging market.