Persistently High LeverageEven with debt-to-equity improving, elevated leverage leaves limited buffer against demand shocks or rising rates. Hospitality is cyclical; high debt amplifies refinancing and interest risks, constraining capital allocation and increasing default risk if operating cash flow weakens.
Volatile Free Cash FlowSevere drop in free cash flow signals cash generation instability, reducing capacity to fund capex, pay down debt or return capital. For an asset-heavy hotel owner, persistent FCF volatility undermines long-term planning and increases reliance on external financing in downturns.
Recovery Phase From Past LossesRecent return to profitability follows multiple years of losses, meaning earnings are not yet proven through a full cycle. This recovery status raises execution risk: sustained profit restoration depends on consistent demand, cost control and avoiding capital missteps.