The following is a summary of the Summit Hotel Properties, Inc. (INN) Q1 2024 Earnings Call Transcript:

Financial Performance:

• Summit Hotel Properties reported a 10% increase in adjusted EBITDA and a 14% rise in adjusted FFO compared to Q1 of the previous year.

• Hotel EBITDA grew by 6%, indicating an 80 basis point margin expansion from Q1 the previous year.

• Q1 2024 results noted a year-over-year increase of 1.5% in Pro forma RevPAR, surpassing the total US lodging industry and upscale chain scale by 130 and 140 basis points respectively.

• Adjusted EBITDA for Q1 2024 totaled $48.8 million, marking a 10% year-over-year increase, while adjusted FFO was $30 million or $0.24 per share, up 14% from last year.

• A reduction of $55 million was witnessed in the company's corporate credit facility balance, following the sales of assets in New Orleans and College Station.

• The company's net debt-to-EBITDA fell by one turn over the last year, thanks to beneficial non-core asset sales and continued growth in hotel EBITDA.

Business Progress:

• As part of Summit Hotel Properties' strategy, three more assets were sold, leading to an updated 2024 guidance range.

• The lagging markets of San Francisco Bay Area, New Orleans, Baltimore, Minneapolis, and Louisville recorded 12% RevPar growth and 44% hotel EBITDA growth, signaling increased future growth potential.

• An increase of $0.02 per share in the common dividend was approved by the board, reaching $0.08 per share or $0.32 per share on an annual basis. This reflects a 33% increase in efforts to prioritize capital returns to shareholders.

• The company's urban and suburban portfolios emerged as key performers, each presenting around 2.5% RevPAR increase in Q1.

• Owing to strong passenger growth and positive comments from major carriers about corporate transient demand and a promising summer travel season, the company's airport hotels were among the top performers.

• The company maintains its full-year guidance for RevPAR growth of 2% to 4% and an adjusted EBITDA range of $188 million to $200 million.

• As part of its ongoing strategic asset sales, the company is liquidating non-core assets that would require a substantial renovation capital.

• Operating expenses have risen by about 2.5% in Q1 2024, and there is a continuous progression on the contract labor front.

• Despite the substantial rise in renovation costs, the company strives to maintain a well-maintained portfolio to avoid deferred CapEx buildup. The company is also optimistic about potential cost decreases.

More details: Summit Hotel Properties Inc IR

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