Service Properties Trust (SVC) reported a net loss of $151.2 million for the first quarter of 2026, compared to a net loss of $116.4 million in the same period of 2025. The company's total revenues decreased by 16.3% to $364.5 million, down from $435.2 million year-over-year. This decline was primarily driven by a 21% drop in hotel operating revenues, which fell to $264.6 million from $335 million, largely due to the sale of several hotels since January 2025. Rental income remained relatively stable, decreasing slightly to $99.9 million from $100.2 million.
In terms of expenses, Service Properties Trust reported a total of $365.3 million, down 18.3% from $447.3 million in the previous year. The decrease in expenses was attributed to lower hotel operating expenses, which fell to $242.6 million from $305.8 million, reflecting the impact of hotel sales. Additionally, the company recorded a loss on asset impairment of $28.1 million, a reduction from $37.1 million in the prior year. The company also incurred a loss of $51.9 million on early extinguishment of debt during the quarter.
Strategically, Service Properties Trust has been active in managing its portfolio, having sold three properties for a total of $8.4 million during the quarter. The company also acquired three net lease properties for $7.4 million. As of March 31, 2026, the company owned 761 service-focused retail net lease properties and 93 hotels, with a total of 21,110 rooms. The net lease properties were 96.6% occupied, with a weighted average remaining lease term of 7.3 years.
Looking ahead, Service Properties Trust is focused on reducing its debt and transitioning to a portfolio with a majority of service-focused retail net lease properties. The company has expressed concerns about potential economic downturns and their impact on consumer confidence and corporate travel demand, which could affect its financial performance. The company has also indicated that it expects to continue funding capital improvements to its properties and managing its debt obligations effectively.
About Service Properties Trust
Service Properties Trust is a real estate investment trust (REIT) specializing in owning and managing a diversified portfolio of hotels and retail net lease properties across the United States and Canada. It generates income through leasing properties to tenants and managing hotel operations via third-party operators. The company focuses on asset management, strategic acquisitions, and long-term value creation in the hospitality and necessity retail sectors.
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