Earning Date, Transcript Summary & Report

Adjusted FFO Increase: 1. Adjusted FFO Growth: Adjusted FFO increased by 4% to $27.6 million or $0.22 per share, marking the third consecutive quarter of year-over-year growth in adjusted FFO.

RevPAR Growth in Hotels: 2. RevPAR Increase in Key Markets: RevPAR for urban and suburban hotels grew by 1.3% and 3.9% respectively, with weekday RevPAR increasing by 1.6%, driven by strong group demand and improving business transient trends.

Asset Sale Success: 3. Successful Asset Sales: The company sold the Four Points by Sheraton, San Francisco Airport Hotel for $17.7 million, contributing to nearly $150 million in gross proceeds from 10 hotel sales over the last 18 months, enhancing the quality of the portfolio.

Financial Stability and Liquidity: 4. Strong Balance Sheet: Summit Hotel Properties maintains total liquidity of over $400 million and a leverage ratio nearly a full turn lower than a year ago, positioning the company well for future growth opportunities.

Quarterly Dividend Announcement: 5. Dividend Declaration: The Board of Directors declared a quarterly common dividend of $0.08 per share, representing a dividend yield of approximately 5.2%, with a modest AFFO payout ratio of approximately 35%, leaving room for potential increases.

Occupancy Decline Impact: 1. Decline in Occupancy: The company reported a 1% decline in occupancy during Q3 2024, contributing to a 3% year-over-year decrease in RevPAR for September, which was primarily driven by reduced occupancy around the Labor Day holiday and hurricane disruptions.

Hurricane Revenue Impact: 2. Revenue Loss from Hurricanes: The hurricanes displaced nearly $400,000 of revenue, which reduced RevPAR growth by 20 basis points and resulted in an estimated $300,000 loss in EBITDA for the third quarter.

Adjusted EBITDA Decline: 3. Adjusted EBITDA Decrease: Adjusted EBITDA for Q3 2024 was $45.3 million, a 2% decrease compared to the same quarter in 2023, primarily driven by net disposition activity compared to a year ago.

Revised RevPAR Growth Guidance: 4. Revised Full-Year Guidance: The company revised its full-year guidance for RevPAR growth down to a range of 1% to 2%, reflecting continued normalization of leisure demand and recent hurricane impacts.

Margin Contraction Forecast: 5. Expected Margin Contraction: The company anticipates a hotel EBITDA margin contraction of approximately 25 basis points year-over-year, with a more significant contraction of 200 basis points expected in the fourth quarter due to challenging property tax comparisons.