Overview of Braemar Hotels & Resorts’ Financial Performance

Braemar Hotels & Resorts is a real estate investment trust (REIT) that invests primarily in high-end luxury hotels and resorts. As of the end of 2025, the company owned 13 hotel properties across the United States, Puerto Rico, and the U.S. Virgin Islands, totaling 3,028 rooms.

In 2025, Braemar experienced a decline in its financial performance compared to the prior year. Net loss attributable to the company increased from $1.7 million in 2024 to $22.3 million in 2025. This was driven by several factors:

Rooms Revenue Decline Rooms revenue, which makes up the majority of Braemar’s total revenue, decreased by $23.4 million or 5.2% in 2025 compared to 2024. This was primarily due to the sale of two hotel properties - the Marriott Seattle Waterfront in August 2025 and the Hilton La Jolla Torrey Pines in July 2024.

For the 13 comparable hotels owned throughout 2025 and 2024, rooms revenue increased by 3.7% due to a 3.7% increase in average daily rates (ADR), partially offset by a 181 basis point decrease in occupancy.

Food and Beverage Revenue Decrease Food and beverage revenue decreased by $1.7 million or 0.9% in 2025. This was driven by decreases at several individual hotels, including The Ritz-Carlton St. Thomas, Cameo Beverly Hills, Capital Hilton, and Park Hyatt Beaver Creek Resort & Spa. The sales of The Clancy, Marriott Seattle Waterfront, and Hilton La Jolla Torrey Pines also contributed to the overall decline.

Other Hotel Revenue Increase Other hotel revenue, which includes items like condominium management fees, resort fees, and parking, increased by $694,000 or 0.7% in 2025. This was due to higher revenue at eight comparable hotels, partially offset by decreases from the sold properties.

Expense Management Braemar was able to manage its expenses effectively in 2025. Rooms expense decreased by 2.0%, food and beverage expense decreased by 2.8%, and other operating expenses decreased by 0.8%. The company also saw a 6.4% decrease in management fees.

However, the company recorded a $54.5 million impairment charge in 2025 related to reductions in the expected holding periods of several hotel properties.

Gain on Asset Sales Braemar recorded significant gains on the sales of hotel properties in both 2025 and 2024. In 2025, the company recognized $82.8 million in gains, primarily from the sales of the Marriott Seattle Waterfront and The Clancy. In 2024, the company recorded $88.2 million in gains, mainly from the sale of the Hilton La Jolla Torrey Pines.

Liquidity and Capital Resources As of December 31, 2025, Braemar held $124.4 million in cash and cash equivalents and $42.5 million in restricted cash. The company’s net debt to gross assets ratio was 46.7%.

Braemar has several upcoming debt maturities, with $723.1 million due in 2026. However, the company holds extension options to extend the maturity on all but $135.0 million of this debt.

The company also has short-term capital commitments of approximately $18.3 million and obligations related to its non-traded preferred stock redemption program. As of February 2026, the company had approximately $42.4 million in preferred stock redemption requests outstanding.

Outlook and Strategic Initiatives Braemar’s board of directors is currently exploring potential strategic alternatives, including a possible sale of the company or individual asset sales. However, the outcome of this process remains uncertain, and there is no guarantee that a transaction will be completed.

The company’s future performance will depend on factors such as overall economic conditions, hotel demand, supply growth in its markets, and its ability to effectively manage costs and capital expenditures. Braemar will also need to navigate the redemption requests for its non-traded preferred stock.

Analysis and Key Takeaways

Braemar’s financial results in 2025 reflected a decline compared to the prior year, with lower revenues and a significant impairment charge weighing on the bottom line. However, the company was able to manage expenses effectively and generate substantial gains from asset sales.

The company’s liquidity position remains relatively strong, with ample cash on hand and extension options on most of its near-term debt maturities. However, the preferred stock redemption program and potential strategic initiatives introduce some uncertainty and potential cash flow demands.

Going forward, Braemar’s performance will depend on its ability to maintain and grow revenues at its hotel properties, while also controlling costs and making prudent capital investments. The outcome of the strategic review process could also have a significant impact on the company’s future direction and financial profile.

Overall, Braemar appears to be navigating a challenging operating environment, but the company’s high-quality hotel portfolio, experienced management team, and financial flexibility provide a solid foundation for the future, assuming the strategic review process yields favorable results.