Service Properties Trust (SVC) reported its financial results for the second quarter of 2025, revealing a total revenue of $503.4 million, a decrease of 1.9% from $512.9 million in the same period last year. The company's hotel operating revenues fell to $404.4 million from $412.5 million, while rental income also saw a decline, dropping to $99.0 million from $100.5 million. For the first half of 2025, total revenues amounted to $938.6 million, down from $949.2 million in the prior year. The net loss for the quarter was $38.2 million, or $0.23 per share, a significant improvement compared to a net loss of $73.9 million, or $0.45 per share, in the same quarter of 2024.
The company experienced a notable reduction in total expenses, which decreased by 7.6% to $438.6 million from $474.4 million year-over-year. This decline was primarily driven by lower depreciation and amortization expenses, which fell to $75.0 million from $95.7 million, and a reduction in losses on asset impairment, which decreased to $17.7 million from $34.9 million. The company also reported a gain on the sale of real estate of $0.2 million, compared to a loss of $0.03 million in the previous year.
In terms of strategic developments, Service Properties Trust has been actively managing its portfolio, having sold 13 properties for a total of $49.3 million during the first half of 2025. The company has also entered into agreements to sell an additional 114 hotels, which are expected to generate approximately $920 million in proceeds. Furthermore, SVC acquired seven net lease properties for $29.9 million during the same period, with plans for further acquisitions in the near future.
Operationally, the company owned 200 hotels and 742 service-focused retail net lease properties as of June 30, 2025. The hotel portfolio reported an occupancy rate of 69.2%, a slight increase from 68.2% in the previous year. Average daily rates (ADR) improved to $146.32, up from $142.99, while revenue per available room (RevPAR) increased to $101.27 from $97.50. The net lease properties maintained a high occupancy rate of 97.3%, with annual minimum rents totaling $386.5 million.
Looking ahead, Service Properties Trust aims to focus on reducing debt and enhancing its net lease portfolio while improving the performance of its retained hotels. The company is currently navigating economic uncertainties, including inflation and interest rate fluctuations, which may impact its operations and financial performance. The management remains optimistic about the potential for growth and stability in its portfolio, contingent on market conditions and the successful execution of its strategic initiatives.
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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