Financial Analysis

Commitments and Contingencies Hotel Management Agreements The Company's hotel properties are operated pursuant to management agreements with various management companies. The remaining terms of these management agreements are up to eight years, not including renewals, and up to 26 years, including renewals. The majority of the Company's management agreements are terminable at will by the Company upon paying a termination fee and some are terminable by the Company upon sale of the property, with, in some cases, the payment of termination fees. Most of the agreements also provide the Company the ability to terminate based on failure to achieve defined operating performance thresholds. Termination fees range from zero to up to two times the annual base management and incentive management fees, depending on the agreement and the reason for termination. Certain of the Company's management agreements are non-terminable except upon the manager's breach of a material representation or the manager's failure to meet performance thresholds as defined in the management agreement. The management agreements require the payment of a base management fee generally between 1% and 4% of hotel revenues. Under certain management agreements, the management companies are also eligible to receive an incentive management fee if hotel operating income, cash flows or other performance measures, as defined in the agreements, exceed certain performance thresholds. The incentive management fee is generall …

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"Debt The Company's debt consisted of the following as of June 30, 2026 and December 31, 2025 (dollars in thousands): Balance Outstanding as of Interest Rate at June 30, 2026 Maturity Date June 30, 2026 December 31, 2025 Unsecured revolving credit facilities Senior unsecured credit facility (1)(2) October 2028 $ $ PHL unsecured credit facility (1) October 2028 Unsecured revolving credit facilities $ $ Unsecured term loans Term Loan 2027 (3) October 2027 360,000 Term Loan 2028 5.15% (1) January 2028 356,652 356,652 Term Loan 2029 4.91% (1) January 2029 185,217 185,217 Term Loan 2031 5.23% (1)(3) February 2031 360,000 Unsecured term loans principal $ 901,869 $ 901,869 Convertible senior notes Convertible Notes 2026 1.75% December 2026 350,000 350,000 Convertible Notes 2030 1.63% January 2030 400,000 400,000 Convertible senior notes principal $ 750,000 $ 750,000 Unsecured senior notes principal 6.38% October 2029 $ 400,000 $ 400,000 Mortgage loans Margaritaville Hollywood Beach Resort (4) September 2026 40,000 Estancia La Jolla Hotel & Spa 5.07% September 2028 52,056 53,395 Mortgage loans principal $ 52,056 $ 93,395 Total debt principal $ 2,103,925 $ 2,145,264 Unamortized debt premium and deferred financing costs, net (23,225) (21,172) Debt, net $ 2,080,700 $ 2,124,092 ______________________ (1) Borrowings bear interest at floating rates. Interest rate at June 30, 2026 gives effect to interest rate hedges. (2) The Company has the option to extend the maturity date for up to …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

"Share-Based Compensation Plan Available Shares The Company maintains the 2009 Equity Incentive Plan (as amended and restated effective May 23, 2025, the ""Plan"") to attract and retain independent trustees, executive officers and other key employees and service providers. The Plan provides for the grant of options to purchase common shares, share awards, share appreciation rights, performance units and other equity-based awards. Share awards under the Plan vest over a period determined by the Board of Trustees, generally over three to five years. The Company pays or accrues for dividends on share-based awards. All outstanding share awards are subject to full or partial accelerated vesting upon a change in control and upon death or disability or certain other employment termination events as set forth in the award agreements. As of June 30, 2026, there were 3,463,261 common shares available for issuance under the Plan. Service Condition Share Awards From time to time, the Company awards restricted common shares under the Plan to officers, employees and new members of the Board of Trustees. These shares generally vest over three to five years based on continued service or employment. The following table provides a summary of service condition restricted share activity for the six months ended June 30, 2026: Shares Weighted-Average Grant Date Fair Value Unvested at December 31, 2025 399,625 $ 15.28 Granted 206,644 $ 11.92 Vested (215,397) $ 16.47 Unvested at June 30, 2026 390,8 …

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Income Taxes As a REIT, the Company generally is not subject to federal corporate income tax on that portion of its taxable income that is currently distributed to shareholders. However, as a REIT, the Company is still subject to certain state and local taxes on its revenues, income and property, and to federal income and excise taxes on its undistributed taxable income. In addition, taxable income of TRSs, including our TRS lessees, is subject to federal, state and local income taxes. A valuation allowance on deferred tax assets is recorded when the Company has determined it more likely than not that future results will not generate sufficient taxable income to realize the deferred tax assets for each jurisdiction. The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by federal, state and local jurisdictions, where applicable. Due to the net operating loss carryforward, tax years 2020 through 2025 remain open to examination by the major taxing jurisdictions to which the Company is subject.

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"New Accounting Pronouncements Disaggregation of Income Statement Expenses In November 2024, the FASB issued ASU 2024-03, Income StatementReporting Comprehensive IncomeExpense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (""ASU 2024-03""). ASU 2024-03 requires public entities to disclose specified information about certain costs and expenses. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The amendments should be applied either retrospectively to all prior periods presented in the financial statements or prospectively after the adoption date. The Company is currently assessing the impact of adopting ASU 2024-03 on its consolidated financial statements and disclosures. Induced Conversions of Convertible Debt Instruments In November 2024, the FASB issued ASU 2024-04, DebtDebt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments (""ASU 2024-04""). ASU 2024-04 clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as induced conversions rather than as debt extinguishments. ASU 2024-04 is effective for annual reporting periods beginning after December 15, 2025, and interim periods within those annual reporting periods, with early adoption permitted. The amen …

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Revenue The Company presents revenue on a disaggregated basis in the accompanying consolidated statements of operations and comprehensive income. The following table presents revenues by geographic location for the three and six months ended June 30, 2026 and 2025 (in thousands): For the three months ended June 30, For the six months ended June 30, 2026 2025 2026 2025 San Diego, CA $ 91,311 $ 86,700 $ 174,633 $ 161,911 Southern Florida/Georgia 76,232 70,951 165,777 156,406 Boston, MA 81,882 80,956 127,218 127,729 San Francisco, CA 40,976 37,309 88,457 71,050 Los Angeles, CA 44,483 44,630 86,785 78,927 Portland, OR 21,673 21,581 35,222 34,378 Washington, D.C. 18,688 20,425 31,034 35,425 Other (1) 31,897 44,985 43,672 61,977 Total Revenues $ 407,142 $ 407,537 $ 752,798 $ 727,803 ______________________ (1) Other includes Chicago, IL, Newport, RI and Santa Cruz, CA . Payments from customers are primarily made when services are provided. Due to the short-term nature of the Company's contracts (other than membership contracts) and the almost simultaneous receipt of payment, almost all of the contract liability balance at the beginning of the period is expected to be recognized as revenue over the following 12 months. Membership deposits, which are received pursuant to membership contracts, are recognized as revenue over the expected life of the membership.

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Operating Segment Information The following table presents the Company's segment hotel revenues, Hotel EBITDA, including significant hotel expenses and its reconciliation to net income (loss) for the three and six months ended June 30, 2026 and 2025 (in thousands): For the three months ended June 30, For the six months ended June 30, 2026 2025 2026 2025 Revenues: Total revenues $ 407,142 $ 407,537 $ 752,798 $ 727,803 Less: Corporate and other revenues 220 209 480 587 Hotel revenues 406,922 407,328 752,318 727,216 Significant hotel expenses: Room expenses 64,836 67,732 124,351 126,255 Food and beverage expenses 72,386 72,658 137,845 137,226 Hotel general and administrative 31,123 31,579 60,235 60,690 Hotel sales and marketing 25,219 25,083 48,030 48,038 Hotel operations and maintenance 31,304 30,963 62,381 61,895 Hotel management fee 11,060 11,636 19,478 19,585 Hotel real estate taxes, personal property taxes, property insurance and ground rent 32,712 34,063 65,990 67,110 Other segment items (1) 14,460 12,635 27,987 24,611 Hotel EBITDA 123,822 120,979 206,021 181,806 Depreciation and amortization (52,099) (57,645) (104,078) (115,188) Interest expense (26,056) (27,282) (52,370) (54,415) Impairment (1,112) (8,800) Business interruption insurance income 3,242 7,545 Income tax (expense) benefit (7,716) (7,812) (7,699) (4,650) Corporate and other (2) (11,926) (12,197) (26,597) (27,993) Net income (loss) $ 24,913 $ 19,285 $ 6,477 $ (12,895) ______________________ (1) Other segment i …

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"Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The accompanying unaudited interim consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (""U.S. GAAP"") and in conformity with the rules and regulations of the U.S. Securities and Exchange Commission (""SEC"") applicable to interim financial information. As such, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted in accordance with the rules and regulations of the SEC. These unaudited consolidated financial statements include all adjustments considered necessary for a fair presentation of the consolidated balance sheets, consolidated statements of operations and comprehensive income, consolidated statements of equity and consolidated statements of cash flows for the periods presented. Interim results are not necessarily indicative of full-year performance, as a result of the impact of seasonal and other short-term variations and the acquisitions and or dispositions of hotel properties. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2025. The Company and its subsidiaries are separate legal entities and m …

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"Equity Common Shares The Company is authorized to issue up to 500,000,000 common shares. Each outstanding common share entitles the holder to one vote on each matter submitted to a vote of shareholders. Holders of common shares are entitled to receive dividends when authorized by the Board of Trustees. Common Share Repurchase Program On October 21, 2025, the Company's Board of Trustees authorized a share repurchase program of up to $150.0 million of common shares. Under this program, the Company may repurchase common shares from time to time in transactions on the open market or by private agreement. The Company may suspend or discontinue this program at any time. Common shares repurchased by the Company cease to be outstanding and become authorized but unissued common shares. During the six months ended June 30, 2026, the Company repurchased 944,452 common shares for an aggregate purchase price of $12.9 million, or an average of approximately $13.63 per share. As of June 30, 2026, $137.1 million of common shares remained available for repurchase under this program. Common Dividends The Company declared the following dividends on common shares/units for the six months ended June 30, 2026: Dividend per Share/Unit For the Quarter Ended Record Date Payable Date $ 0.01 March 31, 2026 March 31, 2026 April 15, 2026 $ 0.01 June 30, 2026 June 30, 2026 July 15, 2026 Preferred Shares The Company is authorized to issue up to 100,000,000 preferred shares of beneficial interest, $0.01 pa …

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