Service Properties Trust (SVC) reported its financial results for the second quarter of 2026, revealing a significant decline in revenue and an increase in net loss compared to the same period in 2025. Total revenues for the three months ended June 30, 2026, were $420.97 million, down 16.4% from $503.44 million in the prior year. The decrease was primarily driven by a 20.9% drop in hotel operating revenues, which fell to $320.07 million from $404.41 million, attributed to the sale of several hotels since April 2025. Rental income, however, saw a slight increase of 1.9%, reaching $100.90 million, compared to $99.03 million in the previous year.
The company's net loss for the second quarter was $223.84 million, a substantial increase from a loss of $38.16 million in the same quarter of 2025. This increase in loss was influenced by a significant impairment charge of $189.10 million related to the carrying value of certain properties, compared to a much lower impairment of $17.65 million in the prior year. Additionally, the company recorded a loss on early extinguishment of debt amounting to $9.38 million, following the redemption of senior notes. The weighted average common shares outstanding increased to 128.08 million from 33.15 million, resulting in a net loss per share of $1.75, compared to $1.15 in the previous year.
In terms of strategic developments, Service Properties Trust completed the acquisition of four net lease properties during the first half of 2026 for a total of $9.17 million. The company also entered into agreements to acquire five additional properties for $14.25 million. On the disposition side, SVC sold 20 properties for a combined sales price of $20.58 million during the same period. The company is currently under agreement to sell 12 hotels with a total of 2,328 keys for approximately $77.35 million, indicating ongoing efforts to streamline its portfolio.
Operationally, the company reported that its net lease properties were 96.6% occupied as of June 30, 2026, with a weighted average remaining lease term of 7.1 years. The largest tenant, TravelCenters of America, accounted for 33.6% of total historical real estate investments. The hotel segment, which includes 93 hotels, experienced an increase in average daily rates (ADR) and revenue per available room (RevPAR) compared to the previous year, reflecting improved performance metrics despite the overall decline in hotel revenues.
Looking ahead, Service Properties Trust expressed caution regarding market conditions, including inflationary pressures and potential economic downturns, which could impact both hotel operations and tenant performance. The company remains focused on reducing debt and transitioning to a portfolio with a majority of service-focused retail net lease properties. The outlook suggests that while the company is taking steps to improve its financial position, external economic factors may pose challenges in the near term.
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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