Elevated And Rising LeverageHigh and increasing leverage raises financial fragility for a hotel REIT where cash flows are cyclical. Elevated debt amplifies refinancing and covenant risk, constrains capital allocation, and limits ability to reinstate common dividends absent sustained cashflow improvement or further asset sales.
Large Floating-rate Interest ExposureSubstantial floating‑rate debt makes interest expense highly sensitive to market rates. In a rising rate environment, cash interest will climb quickly, squeezing free cash flow and slowing deleveraging plans; this structural exposure raises medium‑term financing and distribution uncertainty.
Ongoing Net Losses And AFFO VolatilityRecurrent net losses and periodic negative AFFO reflect margin pressure from renovations, weather and cost headwinds. Volatile or negative earnings undermine retained earnings and raise the likelihood of further asset dispositions or restrained dividend policy until stable cash profitability is reestablished.