Summit Hotel Properties (INN) Q2 2024 earnings summary

Executive summary

• Net income attributable to common stockholders rose to $30.8 million in Q2 2024 from a net loss of $0.8 million in Q2 2023, driven by strong group and business transient demand and urban market exposure.

• Adjusted EBITDAre reached a record $55.9 million, up 5.7% year-over-year, and Adjusted FFO increased 9.7% to $0.29 per share.

• Pro forma RevPAR increased 3.4% year-over-year to $132.41, outperforming the U.S. lodging industry for the 13th consecutive quarter.

• Hotel EBITDA margin improved by 120 basis points to 38.0% in Q2 2024.

• Portfolio consisted of 96 lodging properties with 14,256 guestrooms in 24 states as of June 30, 2024, primarily under premium brands.

Financial highlights

• Q2 2024 total revenues were $193.9 million, nearly flat year-over-year; same-store revenues increased 3.5%.

• Pro forma hotel EBITDA for Q2 increased 7.0% to $73.1 million, with margin expanding 120 bps to 38.0%.

• Adjusted FFO for Q2 2024 was $36.4 million ($0.29/share), up from $33.2 million in Q2 2023.

• Operating expenses increased 2.8% overall and just 0.4% per occupied room, aided by labor efficiencies.

• Weighted-average diluted shares and units outstanding were 123.8 million for Q2 2024.

Outlook and guidance

• Full-year 2024 pro forma RevPAR growth expected between 1.0% and 2.5%, reflecting moderating leisure trends.

• Adjusted EBITDAre guidance for 2024 is $188–$196 million; midpoint down 1% from prior midpoint.

• Adjusted FFO per diluted unit forecasted at $0.91–$0.99; guidance range narrowed.

• Capital expenditures for 2024 projected at $65–$85 million, funded by operations and revolver borrowings.

• Hotel EBITDA margin expected to contract 25 basis points for the year, an improvement from initial guidance.