• AFFO per Share Growth: Nearly 6% for the full year 2024.
• Pro Forma RevPAR Growth: Increased 1.8% for the year.
• Pro Forma Hotel EBITDA Increase: 2% year-over-year.
• RevPAR Growth in Key Markets: Over 13% in five markets, driving a 35% increase in hotel EBITDA.
• Acquisition Activity: Acquired Hampton Inn Boston-Logan Airport and Hilton Garden Inn Tysons Corner for $96 million.
• Joint Venture Portfolio RevPAR Growth: Nearly 3%, driving 5% hotel EBITDA growth in 2024.
• Adjusted EBITDA: $192.2 million for the full year 2024.
• Adjusted FFO: $119.2 million for the full year 2024, an increase of nearly 6% versus 2023.
• AFFO per Share: Increased to $0.96 in 2024 from $0.92 in 2023.
• Fourth Quarter Pro Forma RevPAR Increase: 1.4% year-over-year.
• Fourth Quarter Adjusted EBITDA: $42.1 million.
• Fourth Quarter Adjusted FFO: $25.2 million or $0.20 per share.
• Capital Expenditures: $89.3 million on a consolidated basis for the full year 2024.
• Total Liquidity: Approximately $350 million.
• Dividend Yield: Approximately 5% based on an annualized dividend of $0.32 per share.
• 2025 RevPAR Growth Guidance: 1% to 3%.
• 2025 Adjusted EBITDA Guidance: $184 million to $198 million.
• 2025 Adjusted FFO Guidance: $0.90 to $1 per share.

• Warning! GuruFocus has detected 8 Warning Signs with INN.

Release Date: February 25, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Summit Hotel Properties Inc (NYSE:INN) achieved a full year AFFO per share growth of nearly 6% in 2024.
• The company's RevPAR growth exceeded the industry average for the third consecutive year, with a 1.8% increase.
• Pro forma Hotel EBITDA increased by 2% year-over-year, despite low RevPAR growth and challenging property tax comparisons.
• Summit successfully managed operating expenses, achieving a growth of just 1.5% on a per occupied room basis.
• The company continued its disciplined acquisition strategy, acquiring two hotels with an attractive 8.8% capitalization rate and minimal near-term capital needs.

Negative Points

• RevPAR growth for the first quarter of 2025 is tracking slightly below the midpoint of the full year guidance range of 1% to 3%.
• January winter storms caused airport closures, leading to a modest decline in RevPAR for the month.
• Pro forma hotel EBITDA margins contracted by 140 basis points in the fourth quarter of 2024.
• The company faced difficult year-over-year comparisons due to property tax refunds realized in the fourth quarter of 2023.
• RevPAR for resort and small-town metro assets declined modestly in 2024, partly due to the impact of Hurricane Helene and ongoing renovations.

Q & A Highlights

Q: Can you provide some detail on the booking pace over the next 30 to 60 days, considering weather-related disruptions and Super Bowl benefits? A: Jonathan Stanner, CEO, explained that January was choppy due to weather disruptions, but February saw recovery, partly due to Super Bowl demand in New Orleans. March and April show stable demand trends, with March's spring break weeks looking solid.

Q: What is the next strategic move for Summit, considering the relatively quiet transaction market? A: Jonathan Stanner, CEO, stated that Summit has been active with transactions, focusing on selling lower RevPAR, lower margin hotels needing capital. The company aims to continue being transaction-oriented in 2025, balancing capital needs and opportunistic asset sales.

Q: Can you discuss the RevPAR guidance of 1% to 3% for 2025 and the factors influencing it? A: Jonathan Stanner, CEO, noted that urban and suburban markets are expected to perform better, with continued strength in group demand and business transient recovery. The growth profile is expected to be more balanced across the portfolio compared to 2024.

Q: What is driving the recent management company changes, and how do they impact expense management? A: Jonathan Stanner, CEO, mentioned that changes were made to create more efficient operations in certain markets. The performance aligns with expectations, and while no further changes are planned, the company continuously evaluates management agreements.

Q: Can you provide background on the December acquisitions and their expected returns? A: Jonathan Stanner, CEO, expressed excitement about the acquisitions, highlighting strong going-in yields in gateway city submarkets. The assets are expected to deliver higher unlevered IRRs compared to pre-pandemic levels, with no near-term capital needs.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.