Ashford Hospitality Trust (AHT) risk factors, FY2025 10-K

RISKS RELATED TO OUR BUSINESS

1. 01A financial crisis, economic slowdown, pandemic or epidemic or other economically disruptive event may harm the operating performance of the hotel industry generally. If such events occur, we may be harmed by declines in occupancy, average daily room rates and/or other operating revenues
2. 02Economic conditions in the United States and geopolitical developments could have a material adverse impact on our earnings and financial conditionNew
3. 03Our cash, cash equivalents and investments could be adversely affected if the financial institutions in which we hold our cash, cash equivalents and investments fail
4. 04The hotel industry is highly competitive and the hotels in which we invest are subject to competition from other hotels for guests
5. 05We did not pay cash dividends on our common stock in fiscal year 2025. We do not expect to pay cash dividends on our common stock for the foreseeable future92% rewritten
6. 06any quarter during 2026. The board of directors will continue to review our dividend policy and make future announcements with respect theretoNew
7. 07Because we depend upon our advisor and its affiliates to conduct our operations, any adverse changes in the financial condition of our advisor or its affiliates or our relationship with them could hinder our operating performance
8. 08We depend on our advisor’s key personnel with longstanding business relationships. The loss of our advisor’s key personnel could threaten our ability to operate our business successfully
9. 09We do not have any employees, and rely on our hotel managers to employ the personnel required to operate the hotels we own. As a result, we cannot control staffing at our hotels than we would if we employed such personnel directly
10. 10Our joint venture investments could be adversely affected by our lack of sole decision-making authority, our reliance on a co-venturer’s financial condition and disputes between us and our co-venturers
11. 11Our business strategy depends on our continued growth. We may fail to integrate recent and additional investments into our operations or otherwise manage our future growth, which may adversely affect our operating results
12. 12Because our board of directors and our advisor have broad discretion to make future investments, we may make investments that result in returns that are substantially below expectations or that result in net operating losses
13. 13Hotel franchise or license requirements or the loss of a franchise could adversely affect us
14. 14We may be unable to identify additional investments that meet our investment criteria or to acquire the properties we have under contract
15. 15Our investments are concentrated in particular segments of a single industry
16. 16Our reliance on Remington Hospitality, a subsidiary of Ashford Inc., and on third party hotel managers to operate our hotels and for a substantial majority of our cash flow may adversely affect us
17. 17Our management agreements could adversely affect our sale or financing of hotel properties
18. 18If we cannot obtain additional capital, our growth will be limited
19. 19We compete with other hotels for guests and face competition for acquisitions and sales of hotel properties and of desirable debt investments
20. 20We face risks related to changes in the domestic and global political and economic environment, including capital and credit markets
21. 21We are increasingly dependent on information technology, and cyber-attacks, security problems, artificial intelligence-related risks, or other disruption and expanding social media vehicles present new risks88% rewritten
22. 22obligations on us. Compliance with all such laws and regulations may increase the Company’s operating costs and adversely impact the Company’s ability to market the Company’s properties and servicesNew
23. 23Changes in laws, regulations, or policies may adversely affect our business
24. 24We may experience losses caused by severe weather conditions or natural disasters
25. 25Our financial statements contain a statement regarding a substantial doubt about the Company’s ability to continue as a going concernNew

RISKS RELATED TO OUR DEBT FINANCING

1. 26We have a significant amount of debt, and our organizational documents have no limitation on the amount of additional indebtedness that we may incur in the future20% rewritten
2. 27Higher interest rates have increased our debt payments and such debt payments may remain high21% rewritten
3. 28We may enter into other transactions which could further exacerbate the risks to our financial condition. The use of debt to finance future acquisitions could restrict operations, inhibit our ability to grow our business and revenues, and negatively affect our business and financial results
4. 29Covenants, “cash trap” provisions or other terms in our mortgage loans, as well as any future credit facility, could limit our flexibility and adversely affect our financial condition or our qualification as a REIT
5. 30There is refinancing risk associated with our debt
6. 31Our hedging strategies may not be successful in mitigating our risks associated with interest rates and could reduce the overall returns on an investment in our Company
7. 32We may not be able to raise capital through financing activities and may have difficulties negotiating with lenders in times of distress due to our complex structure and property-level indebtedness21% rewritten

RISKS RELATED TO HOTEL INVESTMENTS

1. 33We are subject to general risks associated with operating hotels
2. 34Declines in or disruptions to the travel industry could adversely affect our business and financial performance
3. 35Some of our hotels are subject to ground leases; if we are found to be in breach of a ground lease or are unable to renew a ground lease, our business could be materially and adversely affected
4. 36We may have to make significant capital expenditures to maintain our hotel properties, and any development activities we undertake may be more costly than we anticipate
5. 37If we have insufficient cash flow from operations to fund needed capital expenditures, then we will need to obtain additional debt or equity financing to fund future capital improvements, and we may not be able to meet the loan covenants in any financing obtained to fund the new development, creating default risks
6. 38The hotel business is seasonal, which affects our results of operations from quarter to quarter
7. 39The cyclical nature of the lodging industry may cause fluctuations in our operating performance, which could have a material adverse effect on us
8. 40Many real estate costs are fixed, even if revenue from our hotels decreases
9. 41The increasing use of internet travel intermediaries by consumers may adversely affect our profitability
10. 42We may be adversely affected by increased use of business-related technology, which may reduce the need for business-related travel
11. 43Our hotels may be subject to unknown or contingent liabilities which could cause us to incur substantial costs
12. 44Future terrorist attacks or changes in terror alert levels could materially and adversely affect us
13. 45We are subject to risks associated with the employment of hotel personnel, particularly with hotels that employ unionized labor

RISKS RELATED TO CONFLICTS OF INTEREST

1. 46Our advisor manages other entities and may direct attractive investment opportunities away from us. If we change our investment guidelines, our advisor is not restricted from advising clients with similar investment guidelines82% rewritten
2. 47Our advisor and its key employees, most of whom are Braemar’s and Ashford Inc.’s and our executive officers, face competing demands relating to their time and this may adversely affect our operations
3. 48Conflicts of interest could result in our management acting other than in our stockholders’ best interest
4. 49Ashford Inc.’s ability to exercise significant influence over the determination of the competitive set for any hotels managed by Remington Hospitality could artificially enhance the perception of the performance of a hotel, making it more difficult to use managers other than Remington Hospitality for future properties
5. 50Under the terms of our hotel management mutual exclusivity agreement with Remington Hospitality, Remington Hospitality may be able to pursue lodging investment opportunities that compete with us
6. 51Our fiduciary duties as the general partner of our operating partnership could create conflicts of interest, which may impede business decisions that could benefit our stockholders
7. 52Our policy regarding conflicts of interest may not adequately address all of the conflicts of interest that may arise with respect to our activities

RISKS RELATED TO DERIVATIVE TRANSACTIONS

1. 53We have engaged in and may continue to engage in derivative transactions, which can limit our gains and expose us to losses
2. 54We are subject to the risk of default or insolvency by the hospitality entities underlying our investments
3. 55The derivatives provisions of the Dodd-Frank Act and related rules could have an adverse effect on our ability to use derivative instruments to reduce the negative effect of interest rate fluctuations on our results of operations and liquidity, credit default risks and other risks associated with our business
4. 56The assets associated with certain of our derivative transactions may not constitute qualified REIT assets and the related income may not constitute qualified REIT income. Significant fluctuations in the value of such assets or the related income could jeopardize our REIT status or result in additional tax liabilities

RISKS RELATED TO INVESTMENTS IN SECURITIES, MORTGAGES AND MEZZANINE LOANS

1. 57Our earnings are dependent, in part, upon the performance of our investment portfolio
2. 58Debt investments that are not United States government insured involve risk of loss
3. 59We may invest in non-recourse loans, which will limit our recovery to the value of the mortgaged property
4. 60Investment yields affect our decision whether to originate or purchase investments and the price offered for such investments
5. 61Volatility of values of mortgaged properties may adversely affect our mortgage loans
6. 62Mezzanine loans involve greater risks of loss than senior loans secured by income-producing properties
7. 63Our prior investment performance is not indicative of future results
8. 64Our investment portfolio will contain investments concentrated in a single industry and will not be fully diversified
9. 65The values of our investments are affected by the U.S. credit and financial markets and, as such, may fluctuate
10. 66We may invest in securities for which there is no liquid market, and we may be unable to dispose of such securities at the time or in the manner that may be most favorable to us, which may adversely affect our business

RISKS RELATED TO THE REAL ESTATE INDUSTRY

1. 67Illiquidity of real estate investments could significantly impede our ability to respond to adverse changes in the performance of our hotel properties and harm our financial condition
2. 68Because real estate investments are relatively illiquid, our ability to sell promptly one or more hotel properties or mortgage loans in our portfolio for reasonable prices in response to changing economic, financial, and investment conditions is limited
3. 69Increases in property taxes would increase our operating costs, reduce our income and adversely affect our ability to make distributions to our stockholders
4. 70The costs of compliance with or liabilities under environmental laws may harm our operating results
5. 71generally do not require our borrowers to obtain environmental insurance on the properties they own that secure their loans from us
6. 72Tax increases and changes in tax rules may adversely affect our financial results71% rewritten
7. 73Our properties and the properties underlying our mortgage loans may contain or develop harmful mold, which could lead to liability for adverse health effects and costs of remediating the problem
8. 74Compliance with the ADA and fire, safety, and other regulations may require us or our borrowers to incur substantial costs
9. 75We may obtain only limited warranties when we purchase a property and would have only limited recourse if our due diligence did not identify any issues that lower the value of our property, which could adversely affect our financial condition and ability to make distributions to our stockholders
10. 76We may experience uninsured or underinsured losses
11. 77reasonable based on management’s experience, our risk profile, the loss history of our hotel managers and our properties, the nature of our properties and our businesses, our loss prevention efforts, the cost of insurance and other factors
12. 78In the future, we may choose not to maintain terrorism or other insurance policies on any of our properties. As a result, one or more large uninsured or underinsured losses could have a material adverse effect on us

RISKS RELATED TO OUR STATUS AS A REIT

1. 79If we do not qualify as a REIT, we will be subject to tax as a regular corporation and could face substantial tax liability
2. 80Even if we qualify and remain qualified as a REIT, we may face other tax liabilities that reduce our cash flow21% rewritten
3. 81Failure to make required distributions would subject us to U.S. federal corporate income tax
4. 82Our TRS lessee structure increases our overall tax liability
5. 83If our leases with our TRS lessees are not respected as true leases for U.S. federal income tax purposes, we would fail to qualify as a REIT
6. 84Our ownership of TRSs is limited and our transactions with our TRSs will cause us to be subject to a 100% penalty tax on certain income or deductions if those transactions are not conducted on arm’s-length terms
7. 85If our hotel managers, including Ashford Hospitality Services LLC and its subsidiaries (including Remington Hospitality) do not qualify as “eligible independent contractors,” we would fail to qualify as a REIT
8. 86Dividends payable by REITs do not qualify for the reduced tax rates available for some dividends
9. 87If our operating partnership failed to qualify as a partnership for U.S. federal income tax purposes, we would cease to qualify as a REIT and would be subject to higher taxes and have less cash available for distribution to our stockholders and suffer other adverse consequences
10. 88Complying with REIT requirements may cause us to forgo otherwise attractive opportunities
11. 89Complying with REIT requirements may limit our ability to hedge effectively
12. 90Complying with REIT requirements may force us to liquidate otherwise attractive investments
13. 91Complying with REIT requirements may force us to borrow to make distributions to our stockholders
14. 92We may distribute taxable dividends that are payable in cash and common stock at the election of each stockholder, subject to certain limitations, including that the cash portion be at least 20% of the total distribution
15. 93The prohibited transactions tax may limit our ability to dispose of our properties
16. 94The ability of our board of directors to revoke our REIT qualification without stockholder approval may cause adverse consequences to our stockholders
17. 95We may be subject to adverse legislative or regulatory tax changes that could reduce the market price of our securities
18. 96If Braemar failed to qualify as a REIT for 2013, it would significantly affect our ability to maintain our REIT status
19. 97Your investment in our securities has various federal, state, and local income tax risks that could affect the value of your investment
20. 98Our failure to qualify as a REIT would potentially give rise to a claim for damages from Braemar
21. 99Declines in the values of our investments may make it more difficult for us to maintain our qualification as a REIT or exemption from the Investment Company Act

RISKS RELATED TO OUR CORPORATE STRUCTURE

1. 100Our charter, the partnership agreement of our operating partnership and Maryland law contain provisions that may delay or prevent a change of control transaction
2. 101Our board of directors may create and issue a class or series of common stock or preferred stock without stockholder approval50% rewritten
3. 102Certain provisions in the partnership agreement of our operating partnership may delay or prevent unsolicited acquisitions of us
4. 103Because provisions contained in Maryland law and our charter may have an anti-takeover effect, investors may be prevented from receiving a “control premium” for their shares
5. 104Certain other provisions of Maryland law, if they became applicable to us, could inhibit changes in control
6. 105We depend on our operating partnership and its subsidiaries for cash flow and are effectively structurally subordinated in right of payment to the obligations of our operating partnership and its subsidiaries, which could adversely affect our ability to make distributions to our stockholders
7. 106Securities eligible for future sale may have adverse effects on the market price of our securities
8. 107An increase in market interest rates may have an adverse effect on the market price of our securities
9. 108Our board of directors can take many actions without stockholder approval
10. 109The ability of our board of directors to change our major policies without the consent of stockholders may not be in our stockholders’ interest
11. 110Our rights and the rights of our stockholders to take action against our directors and officers are limited
12. 111Future issuances of securities, including our common stock and preferred stock, could reduce existing investors’ relative voting power and percentage of ownership and may dilute our share value49% rewritten
13. 112We are not currently eligible to use our effective short form registration statement on Form S-3 or to file a new Form S-3, which may impair our capital raising activitiesNew
14. 113The Rights Agreement adopted in December 2025 to protect our Tax Benefits may delay or prevent unsolicited acquisitions of us, or may adversely affect the market for our common stockNew