The following is a summary of the Summit Hotel Properties, Inc. (INN) Q2 2024 Earnings Call Transcript:
Financial Performance:
Summit Hotel Properties reported a 6% increase in adjusted EBITDAre to nearly $56 million, a quarterly record high.
Adjusted FFO increased by 10% year-over-year.
Pro forma RevPAR growth was 3.4% year-over-year, with an increase in occupancy by 2.4% predominantly in urban and suburban markets.Hotel EBITDA grew by 6% with a flow-through of more than 70%, driving a hotel EBITDA margin expansion of 120 basis points.
For the remainder of the year, full year RevPAR growth range was revised to 1% to 2.5%.
Business Progress:
Continued strong performance in urban markets, with notable growth in Indianapolis, Cleveland, Charlotte, Minneapolis, and Baltimore.
Ongoing renovations and repositioning activities, such as at the Courtyard Fort Lauderdale Beach, aimed at enhancing guest experiences and profitability.
Disposition of 9 hotels since 2023 for $131 million, improving balance sheet health and reducing near-term CapEx requirements.
Implemented revenue boost strategies like paid parking opportunities and implementation of resort fees, increasing ancillary revenue by over 5.5% for the quarter.
Opportunities:
Strong recovery in urban markets gives competitive advantage, particularly in markets like Silicon Valley known for technology-related business travel.
Improved group demand, especially in urban locations, provides resilience and growth potentials.
Risks:
Leisure demand normalizing, particularly noticeable around peak summer travel months, leading to tempered outlook and reduction in expected growth rates.
More details: Summit Hotel Properties Inc IR
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