Summit Hotel Properties Inc (NYSE:INN)
$ 6.4 -0.09 (-1.39%) Market Cap: 693.88 Mil Enterprise Value: 2.01 Bil PE Ratio: 640.00 PB Ratio: 0.76 GF Score: 82/100

Q1 2024 Summit Hotel Properties Inc Earnings Call Transcript

May 02, 2024 / 01:00PM GMT
Release Date Price: $6.18 (+1.81%)

Key Points

Positve
  • Adjusted EBITDAre and adjusted FFO increased by 10% and 14% respectively, compared to the first quarter of last year.
  • Pro forma RevPAR increased by 1.5% year-over-year, outperforming the total U.S. lodging industry and upscale chain scale.
  • Significant market share gains across the portfolio with a RevPAR index of 115% in the first quarter, an increase of 335 basis points.
  • Strong performance in urban and suburban markets, with specific markets like Baltimore, New Orleans, and Minneapolis showing robust RevPAR growth.
  • Successful capital allocation with the sale of 9 hotels over the last 12 months for $131 million at a blended capitalization rate of approximately 5%, enhancing portfolio quality and reducing near-term CapEx requirements.
Negative
  • A 1.4% decrease in average rate year-over-year, concentrated in leisure-oriented markets which offset some of the occupancy gains.
  • Continued softness in the San Francisco market, with downtown San Francisco remaining a pocket of weakness.
  • Leisure market challenges, particularly in ski markets like Silverthorne and Steamboat, where there was a noticeable decline in ADR due to weaker snow seasons compared to the previous year.
  • Increased labor costs and challenges, although moderating, still present issues with wage growth and turnover rates higher than pre-pandemic levels.
  • Potential risks from new brand entries at lower chain scales by major hotel brands, which could impact market dynamics and competitive positioning.
Operator

Welcome to the Summit Hotel Properties 2024 First Quarter Earnings Conference Call. I will now be passing the line to Adam Wudel, Senior Vice President of Finance, Capital Markets and Treasurer.

Adam Wudel
Summit Hotel Properties, Inc. - Senior VP of Finance & Capital Markets

Thank you, Howard, and good morning. I am joined today by Summit Hotel Properties' President and Chief Executive Officer, Jon Stanner, and Executive Vice President and Chief Financial Officer, Trey Conkling. Please note that many of our comments today are considered forward-looking statements as defined by federal securities laws. These statements are subject to risks and uncertainties, both known and unknown, as described in our SEC filings. Forward-looking statements that we make today are effective only as of today, May 2, 2024, and we undertake no duty to update them later. You can find copies of our SEC filings and earnings release, which contain reconciliations to non-GAAP financial measures referenced on this call on our website at

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