Summit Hotel Properties, Inc. (INN) Q4 2024 Earnings Call Transcript

For the period ending December 31, 2024

February 25, 2025 9:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Welcome to the Summit Hotel Properties 2024 Fourth Quarter and Full Year Earnings Conference Call. I will now be passing the line to Kevin Malota, Senior Vice President of Corporate Finance.

Unidentified Company Representative

Thank you, Michelle, 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, February 25th 2025, 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 Kevin. And thank you all for joining us today for our fourth quarter full year 2024 earnings conference call. 2024 was another year of effective execution and meaningful progress for Summit. Positioning the company for continued success in 2025. Today, Trey and I will discuss our solid full year operating and financial results, highlight our recent transaction activity and its role in driving outside future growth, provide an update on our balance sheet and near-term ROI-driven capital expenditures, and share our outlook for 2025. Summit delivered another successful year in 2024, as the strength of our operating platform, coupled with well-executed transaction activity, resulted in full year AFFO per share growth of nearly 6%.

For the third consecutive year, the company's RevPAR growth exceeded the industry average, with pro forma RevPAR growth increasing 1.8% for the year. Our operating team and management company partners continue to do a terrific job managing expenses, as pro forma hotel EBITDA margins were essentially flat year-over-year, driven by operating expense growth of just 1.5% on a per-occupied-room basis. Pro forma hotel EBITDA increased 2% year-over-year, despite the low RevPAR growth environment and difficult year-over-year property tax expense comparisons. Historically, our business model has required 2.5% to 3% RevPAR growth to maintain operating margins. In 2024, we significantly surpassed these expectations, driven by ongoing tight cost controls and our ability to manage hotel-level turnover, as well as reduce our reliance on more expensive and less efficient contract labor. Further validating our thesis for investing in hotels with efficient operating models.