Service Properties Trust Reports Q1 2025 Financial Results with $435.2M Revenue and Increased Net Loss

Service Properties Trust (SVC) reported its financial results for the first quarter of 2025, revealing a total revenue of $435.2 million, a slight decrease of 0.2% from $436.3 million in the same period last year. The company's hotel operating revenues fell to $335.0 million from $336.2 million, while rental income increased marginally to $100.2 million from $100.0 million. The net loss for the quarter was $116.4 million, or $0.70 per share, compared to a net loss of $78.4 million, or $0.48 per share, in the prior year, marking a 48.5% increase in losses year-over-year.

The financial performance reflects several significant changes compared to the previous fiscal period. Total expenses rose by 7.6% to $447.3 million, driven primarily by a $37.1 million loss on asset impairment, which was substantially higher than the $2.5 million recorded in the same quarter of 2024. Additionally, hotel operating expenses increased slightly, while net lease operating expenses surged by 19.2%, indicating rising costs in property management and operations. The company also reported a net gain of $746,000 from the sale of real estate, contrasting with a loss of $2.9 million in the previous year.

Strategically, Service Properties Trust has been active in its real estate portfolio management. During the first quarter, the company sold seven properties for a total of $22.7 million and has plans to sell an additional 119 hotels with a combined net carrying value of $945.1 million throughout 2025. The company has also entered into agreements to acquire nine net lease properties for a total of $33.3 million, indicating a continued focus on expanding its service-focused retail net lease portfolio.

Operationally, as of March 31, 2025, Service Properties Trust owned 202 hotels and 739 service-focused retail net lease properties, with an overall occupancy rate of 97.8% for its net lease properties. The company reported an increase in average daily rates (ADR) and revenue per available room (RevPAR) for its hotels, with ADR rising to $144.61 and RevPAR increasing by 6.1% to $83.52. The company’s largest tenant, TravelCenters of America, accounted for a significant portion of its rental income, with annual minimum rents totaling $259.1 million.

Looking ahead, Service Properties Trust anticipates that economic conditions, including inflation and interest rate fluctuations, may impact its operations and financial performance. The company remains focused on managing its liquidity and capital resources, with plans to utilize proceeds from property sales to repay debt and fund capital improvements. The management expressed confidence in its ability to navigate market challenges while continuing to pursue growth opportunities in its real estate investments.