World’s first Black billionaire leads real estate trust to $328 million Q1 revenue

Key Points

• RLJ’s Q1 revenue rose 1.1% to $328.1 million, amid ongoing cost pressures and market headwinds. 
• Net income fell 33.2% to $3.2 million due to declining EBITDA and rising operational costs, reflecting margin compression amid a challenging macroeconomic environment.
• RLJ sold a non-core hotel for $24.3 million, repurchased 2.7 million shares, and refinanced debt to strengthen its balance sheet and preserve $847.5 million liquidity.

RLJ Lodging Trust, a publicly traded hotel-focused real estate investment trust (REIT) controlled by the world’s first Black billionaire, Robert L. Johnson, opened its 2025 fiscal year with mixed performance, posting a modest increase in total revenue to $328.1 million, alongside a significant decline in earnings.

The modest increase in revenue was fueled by strong performance in urban markets and successful hotel conversions. However, net income declined significantly to $3.2 million, reflecting ongoing margin pressures and a more challenging operating environment.

Revenue edges up, but costs pressure profitability

According to its recently released first quarter 2025 report, RLJ Lodging Trust reported a 1.1 percent increase in total revenue to $328.1 million for Q1 2025, driven by a 1.6 percent rise in comparable revenue per available room (RevPAR) to $141.23. Comparable hotel revenue also saw a modest uptick, growing 1.2 percent to $327 million.

Despite strong gains, net income declined 33.2 percent to $3.2 million, down from $4.7 million last year, driven by a 3.4 percent drop in comparable hotel EBITDA to $85.3 million. Adjusted EBITDA also fell 2.5 percent to $77.6 million, reflecting margin compression amid rising operational costs. Nonetheless, RLJ demonstrated financial discipline, using $24.3 million from a non-core asset sale to repurchase 2.7 million shares. These results highlight the company’s agility and resilience amid ongoing macroeconomic challenges.

CEO stresses disciplined growth strategy

Leslie D. Hale, President and CEO of RLJ Lodging Trust, highlighted strong performance in urban markets and the positive impact of recent hotel conversions. “By recycling capital through asset sales, share buybacks, and balance sheet improvements, we’re well-positioned to navigate ongoing macro uncertainty and create long-term shareholder value,” she said.

In the quarter, RLJ repurchased 2.7 million shares for $24.3 million at an average price of $8.91, while preserving $847.5 million in liquidity. It also sold the Courtyard Atlanta Buckhead for $24.3 million, realizing a $1.3 million gain. Proceeds supported share repurchases and strengthened the company’s financial position. Additionally, RLJ refinanced and upsized a term loan to $300 million, extending its maturity to 2030 and enhancing financial flexibility.

Slight asset dip alongside a relatively stable position

As of Mar. 31, 2025, RLJ Lodging Trust’s total assets stood at $4.82 billion, slightly down 1.36 percent from $4.88 billion. However, equity rose 2.25 percent to $2.30 billion, underscoring a stable financial position. 

Founder Robert L. Johnson remains actively involved in shaping the company’s strategy, reinforcing RLJ’s status as one of the largest publicly traded Black-owned businesses in the U.S. With the hospitality industry navigating shifting market conditions, RLJ’s ability to balance expansion with cost control will be key to sustaining shareholder value in the remaining quarter of 2025 and beyond.