Q1 2024 Sunstone Hotel Investors Inc Earnings Call Transcript
Key Points
- Sunstone Hotel Investors Inc (SHO) reported solid out-of-room spend and strong cost controls, aligning with expectations despite challenging industry comparisons.
- The acquisition of the 630-room Hyatt Regency San Antonio Riverwalk is expected to provide superior near-term growth and diversify cash flow without significant disruption or capital costs.
- The newly converted Westin Washington, D.C. downtown showed significant growth, with first quarter EBITDA $4 million higher than the same period in 2023.
- The Board of Directors declared a 29% increase in the quarterly dividend to $0.09 per share, reflecting the incremental income generated by recent acquisitions and repositioned hotels.
- Sunstone Hotel Investors Inc (SHO) maintains a strong balance sheet with over $240 million in total cash and cash equivalents, providing significant liquidity and investment capacity.
- The first quarter faced challenging industry-wide comparisons, making it difficult to achieve top-line growth.
- Ongoing renovations at Andaz Miami Beach and Mariana Long Beach downtown led to earnings disruptions and displacement costs, impacting short-term profitability.
- Leisure demand moderated during the quarter, with comparable occupancy up marginally but with rates down from previous robust levels.
- The company incurred $3 million of earnings displacement at the Marriott Long Beach downtown due to conversion-related disruptions.
- Full year earnings disruption estimated between $13 million to $15 million due to significant transformation projects, impacting short-term financial performance.
Good morning and Ladies and gentlemen, and thank you for standing by, and welcome to the Sunstone Hotel Investors First Quarter 2020 for earnings call. At this time, all participants are in a listen only mode. Later we will conduct a question-and-answer session and instructions will be given at that time. I would like to remind everyone that this conference is being recorded today, May 6, 2024 at 12:00 PM Eastern Time.
I will now turn the presentation over to Mr. Aaron Ray, Chief Financial Officer. Please go ahead, sir.
Thank you, operator. Before we begin, I would like to remind everyone that this call contains forward-looking statements that are subject to risks and uncertainties, including those described in our filings with the SEC, which could cause actual results to differ materially from those projected. We caution you to consider these factors in evaluating our forward-looking statements. We also note that the commentary on this call will contain non-GAAP financial information,
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