The owner of the Hilton San Francisco Financial District swung to a quarterly profit as room rates, occupancy, and event-driven demand all moved higher.

May 12, 2026

Portsmouth Square, Inc. reported sharply improved third-quarter fiscal 2026 results, with revenue at its Hilton San Francisco Financial District hotel climbing past pre-pandemic levels for the first time on a comparable-quarter basis. The Los Angeles-based company said hotel revenues for the quarter ended March 31, 2026 rose roughly 35 percent year over year to $16.497 million, up from $12.210 million a year earlier.

Management noted that the quarter’s hotel revenue topped the comparable pre-pandemic period ended March 31, 2019 — when revenues totaled $15.469 million — by approximately $1.028 million, a milestone the company described as a meaningful marker of San Francisco’s ongoing recovery.

Bottom Line Swings to Profit

Portsmouth posted GAAP net income of $0.571 million for the quarter, reversing a prior-year loss of $0.712 million. Net income from hotel operations alone reached $0.884 million, compared with a $0.253 million loss in the year-ago period. Hotel operating income before interest, depreciation, and amortization more than doubled to $5.123 million from $2.525 million. The improvement came despite the absence of a $1.416 million gain on debt extinguishment that had benefited the prior-year quarter.

Rate, Occupancy, and Super Bowl Lift

Operating metrics advanced across the board year over year:

• Average daily rate: $306, up from $241
• Occupancy: 94 percent, up from 89 percent
• Revenue per available room: $287, up from $215

Management credited stronger room availability, improving business travel demand supporting midweek rates, and a boost from San Francisco’s hosting of the Super Bowl, which lifted February demand. Results also reflected the September 2025 return of 14 guestrooms to available inventory after previously being used for administrative purposes.

Year-to-Date Trends and Liquidity

For the nine months ended March 31, 2026, hotel revenues advanced about 22 percent to $41.576 million from $33.995 million. The year-to-date GAAP net loss narrowed to $4.305 million from $6.620 million. Segment operating expenses rose to $10.120 million in the latest quarter from $8.587 million a year earlier, reflecting higher activity levels.

Liquidity remained stable. Cash, cash equivalents, and restricted cash totaled $11.804 million at quarter end, compared with $11.722 million at the end of June 2025. Management reiterated that going-concern uncertainty was alleviated following the March 28, 2025 refinancing and concluded that no conditions exist that raise substantial doubt over the next twelve months.

Management Outlook

President David C. Gonzalez pointed to continued improvement in room revenues, rate, occupancy, and availability, alongside disciplined cost management and selective capital investments aligned with Hilton brand standards. Chairman and Chief Executive John V. Winfield expressed cautious optimism about San Francisco’s recovery, while acknowledging that the pace can be uneven and that improving conditions and event activity should support more durable demand over time.