INN 10-K & 10-Q changes, risk factors and insider trading

•Risks related to financing, including the risk of leverage and the corresponding risk of default on our existing indebtedness and potential inability to refinance or extend the maturities of our existing indebtedness;

Our lodging properties are primarily located in the top 50 MSAs and 91% are located within the top 100 MSAs. In certain regions, we have lodging properties that are concentrated geographically, which may increase business risks based on adverse market conditions. Adverse market developments in a particular region, which themselves may become more frequent and severe due to climate change,region could adversely affect lodging demand and rates. Also, adverse market developments caused by increased capacity in a region in which we are located could adversely affect rates or demand for our lodging properties due to increased competition. These conditions could have a material adverse effect on our profitability and cash generation.

We expect to continue to rely on external sources of capital, including debt, convertible debt and equity financing, and contributions from joint venture partners related to joint venture activities, to fund future capital needs. Part of our strategy involves the use of debt financing to supplement our equity capital which may include our revolving credit and term loan facilities, mortgage financing and other unsecured financing. Our ability to effectively implement and accomplish our business strategy will be affected by our ability to obtain and use additional leverage in sufficient amounts and on favorable terms. However, the capital environment is often characterized by extended periods of limited availability of both debt and equity financing, increasing financing costs, stringent credit terms and significant volatility. We may not be able to secure first mortgage financing or increase the availability under, extend the maturity of or refinance our revolving credit and term loan facilities. If we are unable to obtain the needed capital on satisfactory terms or at all, we may not be able to make the investments needed to expand our business, or to meet our obligations and commitments as they mature. Our access to capital will depend upon a number of factors over which we have little or no control, including general market conditions, the market’s perception of our current and potential future earnings and cash distributions and the market price of the shares of our common stock.

Generally, our mortgage debt carries maturity dates or call dates such that the loans become due prior to their full amortization. It may be difficult to refinance or extend the maturity of such loans on terms acceptable to us, or at all. Furthermore, we may not have sufficient borrowing capacity on our 2023 Senior Credit Facility to repay any amounts that we are unable to refinance. We believe that we will be able to refinance or extend the maturity of these loans or will have the capacity to repay them, if necessary, using draws under our 2023 Senior Credit Facility. However, there can be no assurance that our 2023 Senior Credit Facility will be available to repay such maturing debt as draws under our 2023 Senior Credit Facility are subject to certain use restrictions and limitations based upon our unencumbered assets and certain financial covenants.

•undertake construction of certain development assets if aggregate budgeted costs for such assets exceedsexceed a specified percentage of total asset value;

We have entered into sixnine interest rate swaps having an aggregate notional amount of $625.0$983.0 million at December 31, 2024,2025, to hedge against interest rate increases on certain of our outstanding variable-rate indebtedness. In the future, we may manage our exposure to interest rate volatility by using hedging arrangements, such as interest rate swaps, caps, and collars. Hedging arrangements involve the risk that the arrangement may fail to protect or adversely affect us because, among other things:

As a result of any of the foregoing, our hedging transactions, which are intended to limit losses and exposure to interest rate volatility, could adversely affect our consolidated financial position, results of operations, and cash flows or the market price of our stock. At December 31, 2024,2025, our interest rate swaps were in ana net asset position totaling $11.6$2.5 million (see "“Part II – Item 8. – Financial Statements and Supplementary Data – Note 8 – Derivative Financial Instruments and Hedging"”).

SystemCybersecurity security risks, data protection breaches, cyber-attacksrisks and systems integration issuesbreaches could materially disrupt our internal operations or services provided to guests at our lodging properties,properties andor anycompromise suchsensitive disruptioninformation, which could reduce our expected revenue, increase our expenses, damageaffect our reputation and adversely affect our financial condition and stock price.

We rely on computer systems, hardware, software, technology infrastructure and online sites and networks (collectively, "IT Systems") for both internal and external operations that are critical to our business. We own and manage some of these IT Systems but also rely on third parties for a range of IT Systems and related products and services, including but not limited to commercially available systems, software and tools, such as cloud computing services. Our third-party managers and franchisors also rely on informationIT technology networks and systems, including the Internet,Systems to process, transmit and store electronic customer information. These systems require the collection and retention of large volumes of the personally identifiable information of the employees and guests of our lodging properties, includingsuch as credit card numbers. WeAlthough purchasewe some ofand our informationthird-party technology from vendors, on whom our systems depend. We rely on commercially available systems, software, toolsmanagers and monitoring to provide security for processing, transmission and storage of confidential customer information, such as personally identifiable information, including information relating to financial accounts. Although wefranchisors have taken steps to protect the security of our informationIT systemsSystems and the data maintained in those systems, it is possible that our safety andno security measures willcan notguarantee beprotection able to prevent the systems’against improper functioning or damage, or the improper access or disclosure of personally identifiable information such as in the event of cyber-attacks. Cyber-attacks are expected to accelerate on a global basis in both frequency and magnitude as threat actors are becoming increasingly sophisticated in using techniques that circumvent controls, evade detection, and remove or obfuscate forensic evidence, which means that we and our third-partycritical providersthird-parties may be unable to detect, investigate, contain or recover from future attacks or incidents in a timely or effective manner.

CyberLike criminalsmany maycompanies, bewe ableand to penetrate our network security, or the network securitycertain of our propertythird-party managers and franchisors,franchisors have experienced cyberattacks and misappropriateother security incidents, such as phishing attacks and unauthorized access to information stored in IT Systems. While to date no incidents have materially affected our operations or compromisefinancial results, we cannot guarantee that material incidents will not occur in the future. We and our confidentialcritical informationthird orparties thatremain of the guests of our lodging properties, create system disruptions or cause the shutdown of our lodging properties. Computer programmers and hackers also may be ablevulnerable to develop and deploy viruses, “worms” and other malicious software programs (e.g., ransomware) that are designed to attack our computerIT systems,Systems or the computer systems operated by our third-party property managers and franchisors, or otherwise exploit any security vulnerabilities of our respective networks. In addition, sophisticated hardware and operating system software and applications that we and our third-party property managers or franchisors may procure from outside companiesprocured may contain defects in design or manufacture, including “bugs” and other problems that could unexpectedly interfere with our internal operations or the operations at our lodging properties.

The costs to eliminate or alleviate cyber or other security problems, bugs, viruses, worms, malicious software programs and security vulnerabilities could be significant, and efforts to address these problems may not be successful and could result in interruptions, delays, cessation of service and loss of existing or potential business at our lodging properties. Many of the informationIT systems and networksSystems used to operate our lodging properties are managed and protected by our third-party property managers or franchisors and are not under our control.franchisors. Any compromise of the function, security and availability of the information networks managed by our third-party property managers or franchisorsfranchisors, which we do not control, could result in disruptions to operations, delayed sales or bookings, lost guest reservations, increased costs and lower margins.margins Inthat addition,could, thein Pandemicturn, caused a shift to remote work and has increased cybersecurity risk as a result of global remote working dynamics foraffect our customers,consolidated employeesfinancial and third-party providers that present additional opportunities for threat actors to engage in social engineering and to exploit vulnerabilities in non-corporate networks.position. Any of these events could adverselymaterially affect our consolidated financial results, stock price and reputation, result in misstated financial reports and subject us to potential litigation and liability.

Portions of our informationIT technology infrastructureSystems or that of the information technology infrastructure of our third-party property managers and franchisors also may experience interruptions, delays or cessations of service or produce errors in connection with systems integration or migration work that takestake place from time to time. We or our third-party property managers and franchisors may not be successful in implementing new systems and transitioning data, which could cause business disruptions and be expensive, time consuming, disruptive and resource-intensive. Such disruptions could adversely affect the ability of our third-party property managers and franchisors to fulfill reservations for guestrooms and other services offered at our lodging properties.

Any of these itemsconditions could adversely affect our consolidated financial position, results of operations, and cash flows or the market price of our stock.

We may not be able to manage rapidly advancing artificial intelligence in our businessbusiness, which could adversely affect our competitive position.

The evolution of artificial intelligence is occurring at a rapid pace. Artificial intelligence (“AI”) may present an opportunity to create meaningful efficiencies and improve our business performance. Our business could suffer if our franchisors or third-party property management companies cannot quickly or effectively adopt AI at a sufficient pace, which could result, among other things, in loss of market share by us or higher operating costs related to the operation of our business relative to our competitors. If we or our property managers and brand franchisors are unable to address artificial intelligence in our business, we could experience a material adverse effect on our consolidated financial position, results of operations, or the market price of our stock.

Our business is generally correlated to certain macroeconomic trends. During the year ended December 31, 2022 and thereafter, the U.S. economy has experienced a high rate of inflation, which has moderated during the year ended December 31, 2024 but still remains above historical levels.2025. The effects of high inflation or a potential recessionary environment could adversely affect our costs, liquidity, consumer confidence, and demand for travel and lodging and could disrupt our supply chain, which would adversely affect the operation of our lodging properties. A high rate of inflation or disruption of our supply chain will cause our operating and renovation costs to increase. These conditions could have a material adverse effect on our business, consolidated financial position, results of operations and cash flows.

The outbreak of any highly infectious or contagious diseases,diseases could adversely affect the number of guests visiting our lodging properties and disrupt our operations, resulting in a material adverse effect on our business, consolidated financial position, results of operations and cash flows.

The performance of the lodging industry hasis historicallymost beenoften directly correlated to the performance of the general economy and, specifically, growth in U.S. gross domestic product (“GDP”). The lodging industry is also sensitive to business and personal discretionary spending levels. Declines in corporate budgets and consumer demand due to adverse general economic conditions, risks affecting or reducing travel patterns, lower consumer confidence or adverse political conditions can lower the revenue and profitability of our assets and therefore the net operating profits of our investments. Economic weakness could adversely affect our consolidated financial position, results of operations, and cash flows or the market price of our stock.

•governmental restrictions on the nature or size of a project.project;

Consumer trends and preferences continuously change, especially within younger generations. Many new lodging property brands have been introduced over recent years to specifically address the perceived unique needs and preferences of younger travelers. As our portfolio is concentrated in select-service hotels, significant consumer shifts in preferences away from select-service hotels could adversely affect our consolidated financial position, results of operations, and cash flows or the market price of our stock.

•changes in operating expenses; and

In addition, our lodging properties (including our real property, operations and equipment) are subject to various federal, state and local environmental, health and safety regulatory requirements that address a wide variety of issues, including, but not limited to the registration, maintenance and operation of our boilers and storage tanks, air emissions from emergency generators, storm water and wastewater discharges, asbestos, lead-based paint, mold and mildew, and waste management. Some of our lodging properties also routinely handle or use hazardous or regulated substances and waste in their operations (for example, swimming pool chemicals or biological waste). Our lodging properties incur costs to comply with these environmental, health and safety laws and regulations and if these regulatory requirements are not met or unforeseen events result in the discharge of dangerous or toxic substances at our lodging properties, we could be subject to fines and penalties for non-compliance with applicable laws and material liability from third parties for harm to the environment, damage to real property or personal injury and death. We are aware of no past or present environmental liability for non-compliance with environmental, health and safety laws and regulations that we believe would have a material adverse effect on our business, consolidated financial position, or results of operations.

Our lodging properties are subject to various covenants and local laws and regulatory requirements, including permitting and licensing requirements which can restrict the use of our properties and increase the cost of acquisition, development and operation of our lodging properties. Our lodging properties are also subject to regulations intended to address the risk of highly infectious diseases which can restrict certain activities of our lodging properties and result in increased costs. In addition, federal and state laws and regulations, including laws such as the ADA, impose further restrictions on our operations. Under the ADA, all public accommodations must meet federal requirements related to access and use by disabled persons. We have not conducted a comprehensive audit or investigation of all of our properties to determine our compliance. As such, some of our lodging properties currently may be in noncompliance with the ADA. If one or more of the lodging properties in our portfolio isare not in compliance with the ADA or any other regulatory requirements, we may be required to incur additional costs to bring the property into compliance and we might incur damages or governmental fines. In addition, existing requirements may change, and future requirements may require us to make significant unanticipated expenditures. These conditions could adversely affect our consolidated financial position, results of operations, and cash flows or the market price of our stock.

The trading market for our stock may rely in part on the research and reports that industry or financial analysts publish about us or our business. We do not control these analysts. Furthermore, if one or more of the analysts who do cover us downgrades our stock or our industry, or the stock of any of our competitors, the price of our stock could decline. If one or more of these analysts ceasescease coverage of our Company, we could lose attention in the market, which in turn could cause the price of our stock to decline.

The REIT rules and regulations are highly technical and complex. We believe that our organization and method of operation hashave enabled us to meet the requirements for qualification and taxation as a REIT commencing with our short taxable year ended December 31, 2011. However, we cannot provide assurance that we will remain qualified as a REIT.

Overall, no more than 20% (25% for taxable years beginning after December 31, 2025) of the value of a REIT’s assets may consist of stock or securities of one or more TRSs. In addition, the IRC limits the deductibility of interest paid or accrued by a TRS to its parent REIT to provide assurance that the TRS is subject to an appropriate level of corporate taxation. The IRC also imposes a 100% excise tax on certain transactions between a TRS and its parent REIT that are not conducted on an arm’s-length basis. We monitor the value of our investment in our TRSs for the purpose of ensuring compliance with TRS ownership limitations and structure our transactions with our TRSs on terms that we believe are arm’s-length to avoid incurring the 100% excise tax described above. There can be no assurance, however, that we will be able to comply with the 20% (25% for taxable years beginning after December 31, 2025) TRS limitations or to avoid application of the 100% excise tax.

We own and may in the future own interests in entities that have elected to be taxed as a REIT under the U.S. federal income tax laws (each, a “subsidiary REIT”). A subsidiary REIT is subject to the various REIT qualification requirements and other limitations described herein that are applicable to us. If any of our subsidiary REITs were to fail to qualify as a REIT, then (i) such subsidiary REIT would become subject to U.S. federal income tax and (ii) our ownership of shares in such subsidiary REIT would cease to be a qualifying asset for purposes of the asset tests applicable to REITs. If any subsidiary REIT were to fail to qualify as a REIT, it is possible that we would fail certain of the asset tests applicable to REITs, in which event we would fail to qualify as a REIT unless we could avail ourselves of certain relief provisions. We may make “protective” TRS elections with respect to our subsidiary REITs and may implement other protective arrangements intended to avoid such an outcome if a subsidiary REIT were not to qualify as a REIT, but there can be no assurance that such “protective” election and other arrangements will be effective to avoid the resulting adverse consequences to us. Moreover, even if the “protective” TRS election was to be effective in the event of the failure of our subsidiary REIT to maintain its qualification as a REIT, such subsidiary REIT would be subject to federal income tax and we cannot assure you that we would not fail to satisfy the requirement that not more than 20% (25% for taxable years beginning after December 31, 2025) of the value of our total assets may be represented by the securities of one or more TRSs. In this event, we would fail to qualify as a REIT unless we or such subsidiary REIT could avail ourselves or itself of certain relief provisions.

In connection with our purchases and sales of properties, we have received payments in the nature of liquidated damages. The IRC does not specify the treatment of litigation settlements and liquidated damages for purposes of the gross income tests applicable to REITs. The IRS has issued private letter rulings to other taxpayers ruling that such payments will be ignored for purposes of the gross income tests. A private letter ruling can be relied upon only by the taxpayer to whom it was issued. Based on the IRS’s private lettersletter rulings and the advice of our tax advisors, we believe these payments should be ignored for purposes of the gross income tests. No assurance can be provided that the IRS will not successfully challenge that position. In the event of a successful challenge, we believe that we would be able to maintain our REIT status if we qualified to use a REIT “savings clause” and paid the required penalty.

Our reputation could be harmed if we fail, or are perceived to fail, to comply with various regulatory requirements or if we are unable to meet expectations in a number of areas such as health, safety and security; sustainability; environmental stewardship; climate change; human rights; human capital and corporate governance. We manage a broad range of corporate responsibility matters, taking into consideration their expected effect on the sustainability of our business over time, and the potential effect of our business on society and the environment. In addition, such efforts can be costly and complex; both guest and shareholder expectations regarding such matters are evolving, and navigating these issues will require us to successfully manage differing views on these matters. Adverse incidents with respect to our corporate responsibility efforts could negatively affect our reputation, the cost of our operations, and relationships with guests and investors, all of which could adversely affect our business, consolidated results of operations, and the price of our stock.

Room-night demand in the U.S. lodging industry is generally correlated to certain macroeconomic trends. Key drivers of demand, and therefore lodging revenues, include changes in gross domestic product, corporate profits, capital investments, employment, government policy, inbound international travel, and employment.consumer and corporate sentiment. From a cost perspective, elevated inflation increased the cost of salaries, wages, supplies, material, freight, insuranceinsurance, and energy in recent years. A portion of these costs were partially offset by increases in average guestroom rates for lodging priceproperties. increases. While certain costs remain above historical levels, expenseExpense growth has moderated to a pace consistent with historical long-term inflation rates.rates; however, certain costs remain above historical levels and could be further affected by changes in tariff policies and agreements.

During 2024,2025, we experienced a modest same-store revenue growthdecline resulting primarily from a reduction in government-related and inbound international travel. Ongoing macroeconomic uncertainty has had a negative effect on consumer and corporate sentiment and spending, and resulted in modest near-term pricing pressure in certain lodging demand segments. This uncertainty has been driven by various factors, including the current political environment, recent policy changes, such as atariff result of strong grouppolicies, and improvedongoing businessconcerns transientrelated demandto whichinflationary was partially offset by normalization in leisure demand.pressures. The medium- and long-term outlook for the industry revenue growth remainsremain favorable as forecasted room night demand growth and increases in average daily rate, combinedcoupled with minimal supply growth, are expected to drive continued industry RevPAR growth over the next several years.

DuringIn February 2025, we closed on the first quartersale of 2023, we entered into a purchase and sale agreement with a third-party to sell a 5.99-acre parcel of undeveloped land in San Antonio, TX for $1.3a million.selling The property was recorded in Assets held for sale, net at December 31, 2024. In February 2025, we closed the saleprice of the$1.3 property.million, which approximated its carrying amount.

The following table contains key operating metrics for our total portfolio and our same-store portfolio for the year ended December 31, 20242025 compared with the year ended December 31, 20232024 (dollarsdollar amounts in thousands, except ADR and RevPAR). Our same-store portfolio consists of properties that we owned as of December 31, 20242025 and that we have owned at all times since January 1, 2023.2024.

•Other Hotel Operating Revenues and Expenses.RevPAR. Other lodging property operatingRoom revenues for our total portfolio increaseddecreased by $1.7$6.9 million for the year ended December 31, 20242025 compared with the year ended December 31, 20232024 as a result of a $2.5$12.8 million increasedecrease in same-store Otherrevenues lodgingdriven propertyprimarily by reduced government-related and operatinginbound revenuesinternational primarily related to an increase in parking and resort fees due to higher occupancy,travel, partially offset by a $0.8$5.9 million decreaseincrease in Other lodging property operatingroom revenues drivendue byto the net effect the sale of the 2024 Sold Properties and the 2023 Sold Properties, and the acquisition of the 2024 Acquired Properties and the 2023sale Acquiredof Properties.the 2025 Sold Properties and the 2024 Sold Properties (collectively, the “Sold Properties”).

The•Room $0.5Expenses. millionRoom decreaseexpenses infor our total portfolio Otherincreased lodgingby property$4.7 operating expensesmillion for the year ended December 31, 20242025 in comparisoncompared with the year ended December 31, 20232024 was driven byas a $7.5result of a $1.4 million decreaseincrease in Other lodging property operatingroom expenses due to the net effect of the sale of the 2024 Sold Properties and the 20232025 Sold Properties, and the acquisition of the 2024 Acquired Properties and the 2023 Acquired Properties, partiallycoupled offset bywith a $7.0$3.3 million increase in same-store Other lodging property operatingroom expenses thatdue resulted fromto increased labor costs, credit card commissions, sales and marketingbenefits costs, and utilities.expenses.

The following table includes other consolidated income and expenses for 20242025 compared with 2023the prior year (dollarsdollar amounts in thousands):

•Property Taxes, Insurance and Other. The $1.1$0.6 million decreaseincrease in Property taxes, insurance and other during the year ended December 31, 20242025 is primarily thedue to a $1.1 million increase in property taxes as a result of greaterincreased reductionsproperty assessment values in propertycertain taxlocations expensesand duringhigher thecash yearrefunds ended December 31, 2024 compared within the prior year as a result of successful appeals, a $0.4 million increase in business taxes primarily due to successfulfranchise appealtax efforts,refunds coupledreceived within athe reductionprior year, and $0.2 million increase due to the net effect of statethe franchiseacquisition taxesof the 2024 Acquired Properties and otherthe taxsale accruals duringof the period,Sold partiallyProperties, offset by ana increase$1.2 million decrease in insurance costs.premiums in the current year.

•Management Fees. Management fees decreased during the year ended December 31, 20242025 by $2.6$0.1 million due to the net effect of the sale of the 2024 Sold Properties and the 2023 Sold Properties, and the acquisition of the 2024 Acquired PropertiesProperties. and the 2023 Acquired Properties, and lowerSame-store management fees duewere relatively flat from the prior year to amendmentsthe current year as a result of a decrease in management fees related to certainlower property management agreementsrevenues during the year ended December 31, 2024.2025, offset by certain management fee adjustments in prior years.

•Depreciation and Amortization. Depreciation and amortization decreasedincreased by $4.5$3.2 million for the year ended December 31, 20242025 compared with the prior year ended December 31, 2023 primarily due to aan net reductionincrease of $2.9 million in depreciation and amortization expensedue of $5.1 million as a result ofto the combinednet effect of the sale of the 2024 Sold Properties and the 2023 Sold Properties, and the acquisition of the 2024 Acquired Properties and the 2023 Acquired Properties, partiallyin offsetaddition byto a $0.6$0.3 million increase in same-store depreciation and amortization due to assets placed in service as a result of completed renovations.

•Corporate General and Administrative. Corporate general and administrative expenses decreasedincreased by $0.6$0.9 million for the year ended December 31, 20242025 compared with the prior year ended December 31, 2023 primarily due to a decrease in legal and professional fees of $1.0 million, partially offset by a $0.4$0.7 million increase in non-cash stock compensation expenses, and an increase of approximately $0.2 million in professional fees and corporate employee-related costs.

•Loss on Impairment and Write-down of Assets. During the year ended December 31, 2023,2025, the Company recorded a Lossloss on write-down of assets of $16.7$1.8 million to reduce the carrying amountsamount of theone threeproperty lodgingclassified propertiesas that were under contract to sell or being marketedHeld for sale at December 31, 2025 to theirits expected net selling pricesprice less estimated costs to sell.

•Gain (loss) on Disposal of Assets, net. The gain on disposal of assets, net of $28.9$6.6 million for the year ended December 31, 20242025 was primarily the result of a $28.3 million gain recorded on the sale of a portfolio of two lodging properties in New Orleans, LA, a $0.4$4.2 million gain recorded on the sale of the Four PointsCourtyard by Marriott Sanin FranciscoAmarillo, AirportTX, and ana aggregate $0.2$2.5 million gain recorded on the sale of Hilton Garden Inn - Bryan (College Station), TX and the HyattCourtyard Placeby -Marriott DallasKansas (Plano),City, TX.MO.

•Interest Expense. Interest expense decreased by $4.2$1.9 million primarily due to lower average outstanding debt and a reduction in interest rates for the year ended December 31, 20242025 compared with the yearprior endedyear, Decemberpartially 31,offset 2023.by a $0.3 million increase in amortization of deferred financing costs related to the refinancing of the $400 million 2025 GIC Joint Venture Term Loan (as defined in “Part II - Item 8. - Financial and Supplementary Data - Note 6 - Debt”

•Other Income, net. Other income, net for the year ended December 31, 20242025 consists primarily of third-party tenant income of $2.2$3.1 million, the realization of $2.0$2.2 million of tax rebates related to the NCI Transaction and $0.5 million in amortization of key money liabilities, partially offset by a net casualty loss of $1.6 million, $0.3 million of expensed debt transaction costs related to the refinancing of the 2022 GIC Joint Venture Term Loan with the $400 million 2025 GIC Joint Venture Term Loan (both of which are as defined in "“Part II - Item 8. - Financial and Supplementary Data - Note 6 - Debt"” to the accompanying Consolidated Financial Statements), and miscellaneous$0.9 incomemillion of $1.0 million, partially offset by debt transaction costs ofrelated $0.6to millionproperty andmanager net casualty losses of $0.2 million.transitions.

Other income, net for the year ended December 31, 20232024 consists primarily of third-party tenant income of $1.5$2.2 million andmillion, the realization of $1.8$2.0 million of tax rebates related to the NCI TransactionTransaction, duringand themiscellaneous period,income of $1.0 million, partially offset by debt transaction costs of $0.6 million and a net casualty losses of $2.1 million, and other costsloss of $0.2 million.

•Income Taxtax Benefitbenefit (Expense).amounted We recorded anto $8.7 million income tax benefit during the year ended December 31, 2024,2024 and was primarily due to the reversal of a significant portion of our valuation allowance totaling $12.1 million, partially offset by current federal and state income tax expenses of $2.6 million, and deferred tax expense of $0.8 million for the year ended December 31, 2024. We reversed the valuation allowance during the year ended December 31, 2024 based on our determination that it is probable that we will realize the tax benefits related to a significant portion of our deferred tax assets. Income tax expense amounted to $2.8 million during the year ended December 31, 2023 and was primarily related to federal and state income taxes on our TRSs.

Adjusted EBITDAre increaseddecreased $2.2$17.3 million for the year ended December 31, 20242025 in comparison with the year ended December 31, 20232024 as a result of a decrease in Hotel EBITDA (see “Part II - Item 8. - Financial Statements and Supplementary Data - Note 18 – Segment Reporting”) due to modesta growthdecline in same-store RevPAR andresulting Hotelfrom EBITDAa drivenreduction byin improving demand for business transientgovernment-related and groupinbound international travel, which mitigated some of the effect of the normalization in leisure demand, partially offset by a decrease in hotel EBITDA fromand the net effect of the acquisition of the 2024 Acquired Properties and the 2023 Acquired Properties, and the sale of the 2024 Sold Properties and the 2023 Sold Properties.

Our long-term cash obligationsuses consistare primarily ofrelated to the costs of acquiring additional lodging properties, renovations and other non-recurring capital expenditures that periodically are made with respect to our lodging properties, dividends and distributions to our stockholders and holders of Common and Preferred Units in our Operating Partnership when declared, and scheduled debt payments, including maturing loans.

•the effect of government shut-downsshutdowns;

•risks associated with lodging property acquisitions, including the ability to ramp up and stabilize newly acquirednewly-acquired lodging properties with limited or no operating history or that require substantial amounts of capital improvements for us to earn economic returns consistent with our expectations at the time of acquisition;

Summit Hotel Properties, Inc. is a self-managed lodging property investment company that was organized in June 2010 and completed its initial public offering in February 2011. We focus on owning lodging properties with efficient operating models that generate strong margins and investment returns. Our lodging properties are typically located in markets with multiple demand generators such as corporate offices and headquarters, retail centers, airports, state capitols, convention centers, and leisure attractions. Substantially all of our assets are held by, and all of our operations are conducted through, our operating partnership, Summit Hotel OP, LP (the “Operating Partnership”). Through a wholly-owned subsidiary, we are the sole general partner of the Operating Partnership. At MarchJune 31,30, 2026, we owned, directly and indirectly, approximately 89% of the Operating Partnership’s issued and outstanding common units of limited partnership interest (“Common Units”), and all of the Operating Partnership’s issued and outstanding 6.25% Series E and 5.875% Series F preferred units of limited partnership interest. NewcrestImage Holdings, LLC and NewcrestImage Holdings II, LLC own all of the issued and outstanding 5.25% Series Z Cumulative Perpetual Preferred Units of the Operating Partnership (“Series Z Preferred Units”), which waswere issued as part of the NCI Transaction (as defined in “Note 5 -Debt- Debt” to the accompanying Condensed Consolidated Financial Statements). We collectively refer to preferred units of limited partnership interests of our Operating Partnership as “Preferred Units.”

At MarchJune 31,30, 2026, our portfolio consisted of 94 lodging properties with a total of 14,226 guestrooms located in 24 states of the United States of America. We own our lodging properties in fee simple, except for six lodging properties which are subject to ground leases or subleases. As of MarchJune 31,30, 2026, we own 100% of the outstanding equity interests in 52 of the 94 lodging properties. We own a 51% controlling interest in 39 lodging properties through a joint venture that was formed in July 2019 with USFI G-Peak, Ltd. (“GIC”), a private limited company incorporated in the Republic of Singapore (the “GIC Joint Venture”). We also own 90% equity interests in two separate joint ventures (the “Brickell Joint Venture” and the “Onera Joint Venture”). The Brickell Joint Venture owns two lodging properties, and the Onera Joint Venture owns one lodging property.

Room-night demand in the U.S. lodging industry is generally correlated to certain macroeconomic trends. Key drivers of demand, and therefore lodging revenues, include changes in gross domestic product, corporate profits, capital investments, employment, government policy, inbound international travel, and consumer and corporate sentiment. FromHotel a cost perspective, elevated inflation increased the cost of salaries, wages, supplies, material, freight, insurance,demand and energypricing dynamics have improved in recent years.months Aand, portioncombined ofwith thesea costsstabilized werecost partiallyenvironment, offsethave by increasesresulted in averagehotel guestroomlevel ratesprofit formargins lodgingexpanding. properties. Expense growth has moderated to a pace consistent with historical long-term inflation rates; however,However, certain costs remaincontinue to grow above historical levels and could be further affected by changes in tariffhotel policiesdemand andpatterns tradeor agreements.operating cost dynamics could affect our ability to continue to drive hotel level profit growth.

According to current chain scales as defined by STR Global (“STR”), as of MarchJune 31,30, 2026, six of our lodging properties with a total of 954 guestrooms are categorized as Upper-upscale hotels, 71 of our lodging properties with a total of 10,944 guestrooms are categorized as Upscale hotels and 15 of our lodging properties with a total of 2,248 guestrooms are categorized as Upper-midscale hotels. We have two independent lodging properties that are not categorized by STR. Lodging property information at MarchJune 31,30, 2026 is as follows:

Comparison of the Three Months Ended MarchJune 31,30, 2026 with the Three Months Ended MarchJune 31,30, 2025

The following table contains key operating metrics for our portfolio for the three months ended MarchJune 31,30, 2026 compared with the three months ended MarchJune 31,30, 2025 (dollars in thousands, except ADR and RevPAR).

(21) Same-store information includes operating results for 94 hotels owned by the Company as of January 1, 2025, and at all times during the three months ended MarchJune 31,30, 2026, and 2025.

The portfolio information above for the three months ended MarchJune 31,30, 2026 and 2025 reflects operating results for various portions of each period for certain lodging properties as a result of sales of lodging properties. The following table details how the disposition transactions affect each reporting period:

Changes from the three months ended MarchJune 31,30, 2026 compared with the three months ended MarchJune 31,30, 2025 were due to the following:

•Revenues and RevPAR. Room revenues for our total portfolio during the firstsecond quarter of 2026 compared with the firstsecond quarter of 2025 decreasedincreased by $1.2$5.5 million primarily as a result of an $8.7 million increase in same-store room revenues, partially offset by a $1.8$3.2 million decrease in room revenues due to the sale of three lodging properties (collectively, the “Sold Properties”), partially offset by a $0.6 million increase in same-store revenues.. The same-store increase was primarily driven by theimproved completionstrong ADR performance across substantially all of our markets, in addition to incremental demand related to special events in certain markets such as the renovationFIFA of2026 World Cup tournament, as well as ongoing performance improvement from the Courtyard Oceanside Fort Lauderdale Beach and improved performance in markets such as San Francisco and Phoenix, offset by decreased performance due tofollowing the lackcomprehensive of snowfall in leisure-oriented mountain destinations, the temporary closure of convention centers in various markets, and an unfavorable Super Bowl host city comparison.renovation.

Occupancy decreased 0.9%1.9% and ADR increased by 2.0%7.7% for the total portfolio during the firstsecond quarter of 2026, which resulted in a 1.1%5.6% increase in RevPAR. On a same-store basis, we experienced a decrease of 1.3%1.9% in occupancy and a 1.5%7.1% increase in ADR during the firstsecond quarter of 2026. This resulted in an increase in same-store RevPAR of 0.2%.5.0%. The increase in ADR was driven by improved performance in higher rated demand segments.segments, notably the retail segment, and broad-based improvements in the corporate negotiated segment.

•Room Expenses. Room expenses for our total portfolio for the firstsecond quarter of 2026 compared with the firstsecond quarter of 2025 increased $0.2 million as a result of a $0.7$0.8 million increase in same-store room expenses primarily related to increases in laborwages and benefitsemployee costsbenefits, which were partially offset by decreased utilization of contract labor. The same-store increase was partially offset by a $0.5$0.6 million decrease due to the sale of the Sold Properties.

•Food and Beverage Revenues and Expenses. Total portfolio food and beverage revenues increaseddecreased $0.5$0.1 million for the firstsecond quarter of 2026 primarily due to a $0.6$0.3 million decrease from the sale of the Sold Properties, partially offset by a $0.2 million increase in same-store food and beverage revenues driven by theincreased completion of the renovation of the Courtyard Oceanside Fort Lauderdale Beachbanquet and othercatering food and beverage initiatives, offset by a $0.1 million decrease due to the sale of the Sold Properties.sales. Total portfolio food and beverage expenses increased by $0.5$0.1 million as a result of a $0.7$0.3 million increase in same-store food and beverage expenses primarilydue to support the increaseincreases in foodlabor and beveragebenefit revenues,expenses, partially offset by a $0.2 million decrease due to the sale of the Sold Properties.

•Other Lodging Property Operating Revenues and Expenses. Other lodging property operating revenues for our total portfolio during the firstsecond quarter of 2026 compared with the firstsecond quarter of 2025 increased $1.3$0.7 million primarilyas a result of a $0.9 million increase in same-store other revenues due to increases in same-store resort and parking fees.fees, partially offset by a $0.2 million decrease due to the sale of the Sold Properties.

The $1.7 million increase in other lodging property operating expenses for the total portfolio for the three months ended MarchJune 31,30, 2026 in comparison with the three months ended MarchJune 31,30, 2025 was attributable to a $2.6$3.1 million increase in same-store other lodging property operating expenses partially offset by a $0.9$1.4 million decrease due to the sale of the Sold Properties. The same-store increase was driven by increased royaltiesfranchise royalty and franchiserelated brand fees as well as increased credit card fees, propertywhich operationwas commensurate with increases in revenues, and maintenancean costs,increase utilities,in administrative and laborgeneral expenses.expenses due to increases in wages and earned incentives as a result of improved performance.

The following table includes other consolidated income and expenses for the three months ended MarchJune 31,30, 2026 compared with the three months ended MarchJune 31,30, 2025 (dollars in thousands):

Changes for the three months ended MarchJune 31,30, 2026 compared with the three months ended MarchJune 31,30, 2025 were due to the following:

•DepreciationProperty Taxes, Insurance and Amortization.Other. DepreciationProperty taxes, insurance and amortizationother decreased by $0.5$0.1 million during the three months ended MarchJune 31,30, 2026 dueas toa result of a $0.3 million decrease from the sale of the Sold Properties, partially offset by additionala depreciation$0.2 expensemillion related to assets placedincrease in servicesame-store asproperty ataxes, resultinsurance ofand completed renovations.other.

•Corporate General and Administrative. Corporate general and administrative expenses increaseddecreased by $0.3$0.9 million during the three months ended MarchJune 31,30, 2026 primarily due to increasesthe in$1.4 non-cashmillion reduction to stock-based compensation expense resulting from the reversal of previously recognized compensation cost upon the forfeiture of unvested stock compensationawards expensesfollowing andthe departure of our former Chief Financial Officer, partially offset by a $0.3 million increase in corporate employee-related costs.costs, a $0.2 million increase related to software implementation costs and a $0.2 million increase in professional fees.

•Interest Expense. Interest expense increased by $0.5$1.4 million during the three months ended MarchJune 31,30, 2026, primarily due to the refinancing in February 2026 of the $287.5 million 1.5% Convertible Notes with the $275 million 2025 Delayed Draw Term Loan, which has a higher variable interest rate.rate, partially offset by a slight decrease in variable interest rates and average outstanding debt balances during the current period.

•Other Income, net. Other income, net for the three months ended MarchJune 31,30, 2026 consists primarily of $0.6$0.8 million of third-party tenant income and the realization of approximately $0.6 million of tax rebates related to the NCI Transaction during the period, partially offset by a net casualty loss of $0.3 million and debt transaction costs of $0.1 million.

Other income, net for the three months ended MarchJune 31,30, 2025 consists primarily of $0.7$0.9 million of third-party tenant income and the realization of approximately $0.7$0.3 million of tax rebates related to the NCI Transaction during the period, partially offset by a net casualty loss of $0.3$0.4 million.

•Income Tax Expense. The Company recorded an income tax expensebenefit of $0.9$1.4 million during the three months ended MarchJune 31,30, 2026, compared to an income tax expense of $0.8$1.2 million during the same period in the previous year. Income tax expense varies based on changes in our effective tax rate and variability in quarterly net income (loss).

The following is an unaudited reconciliation of our Net (loss) income, determined in accordance with GAAP, to EBITDA, EBITDAre and Adjusted EBITDAre, (in thousands):

Adjusted EBITDAre decreasedincreased $0.8$3.9 million for the three months ended MarchJune 31,30, 2026 in comparison with the three months ended MarchJune 31,30, 2025. The decreaseincrease is primarily due to improved operating performance, partially offset by the sale of the Sold Properties. Adjusted EBITDAre increased $3.1 million for the six months ended June 30, 2026 in comparison with the six months ended June 30, 2025. The increase is primarily due to improved operating performance in the second quarter of 2026, partially offset by the sale of the Sold Properties.

The following is an unaudited reconciliation of our Net (loss) income, determined in accordance with GAAP, to FFO and AFFO (in thousands, except per share/unit amounts):

AFFO applicable to shares of common stock and Common Units decreasedincreased by $1.8$2.2 million for the three months ended MarchJune 31,30, 2026 compared with the three months ended MarchJune 31,30, 2025. The decreaseincrease is primarily due to theimproved saleoperating ofperformance, thepartially Soldoffset Properties andby increased interest expense due to the refinancing of the $287.5 million 1.5% Convertible Notes with the $275 million 2025 Delayed Draw Term Loan in February 2026.2026 and the sale of the Sold Properties.