Summit Hotel Properties, Inc. (NYSE:INN) Q2 2023 Earnings Conference Call August 3, 2023 10:00 AM ET

Company Participants

Adam Wudel - Investor Relations

Jon Stanner - President and Chief Executive Officer

Trey Conkling - Executive Vice President and Chief Financial Officer

Conference Call Participants

Austin Wurschmidt - KeyBanc Capital Markets

Michael Bellisario - Baird

Bill Crow - Raymond James

Dany Asad - Bank of America

Operator

Good day and thank you for standing by. Welcome to the Summit Hotel Properties Q2 2023 Earnings Conference Call. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Adam Wudel, SVP of Finance, Capital Markets and Treasurer. Please go ahead.

Adam Wudel

Thank you, Tanya 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, August 3, 2023, 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 www.shpreit.com.

Please welcome Summit Hotel Properties President and Chief Executive Officer, Jon Stanner.

Jon Stanner

Thanks, Adam, and thank you all for joining us today for our second quarter 2023 earnings conference call. During today’s call, we will discuss recent industry trends and the continued improvement in many of our key operating metrics, which are increasingly being driven by non-leisure demand segments, urban markets, and the NewcrestImage portfolio.

We will also provide an update on our recent transaction and balance sheet activity as well as review our revised guidance range, which we provided in our earnings release yesterday afternoon. Industry-wide demand trends normalized in the second quarter as easier Omicron variant driven comparisons in the first quarter were replaced with more difficult comparisons to last year’s second quarter when robust pricing elastic and predominantly domestically concentrated leisure demand drove tremendous top and bottom line growth.

Despite the more difficult comparisons, key operating metrics in our portfolio continued to improve in the second quarter as pro forma RevPAR increased 3.5% compared to the second quarter of last year, and once again reached a new nominal RevPAR high since the onset of the pandemic. RevPAR growth in the quarter was driven by a relatively balanced mix of occupancy and average rate growth and was mostly concentrated midweek, and continuing to recover urban and suburban markets. RevPAR growth for our urban and suburban portfolios, which collectively comprise approximately 75% of our revenue base increased 6% and 5%, respectively, year-over-year during the second quarter.