Summary and Analysis of Key Points

Overview of the Company’s Financial Performance:

• Summit Hotel Properties, Inc. is a real estate investment trust (REIT) that owns and operates lodging properties.
• The company’s financial performance in 2024 was characterized by modest growth in same-store revenue per available room (RevPAR) and hotel EBITDA, driven by improving demand for business transient and group travel, which helped offset some of the normalization in leisure demand.
• The company’s total portfolio RevPAR increased by 3.7% in 2024 compared to 2023, primarily due to the net effect of property acquisitions and dispositions.
• Adjusted EBITDA re, a key non-GAAP metric, increased by $2.2 million in 2024 compared to 2023.

Revenue and Profit Trends:

• Total portfolio revenues decreased by 0.6% in 2024 compared to 2023, primarily due to the net effect of property sales and acquisitions.
• Same-store revenues increased by 2.1% in 2024, driven by a 1.2% increase in occupancy and a 0.4% increase in average daily rate (ADR).
• Hotel gross operating profit (GOP) and hotel EBITDA margins remained relatively stable, with a slight decrease due to the net effect of property sales and acquisitions.

Strengths and Weaknesses: Strengths:

• Diversified portfolio of well-located, efficient lodging properties
• Improving demand for business transient and group travel
• Successful capital recycling through strategic property acquisitions and dispositions
• Strong liquidity and access to capital

Weaknesses:

• Normalization of leisure travel demand
• Exposure to rising costs, including labor, supplies, and energy

Outlook:

• The long-term outlook for the industry remains favorable, with forecasted room night demand growth and increases in ADR expected to drive continued RevPAR growth.
• The company is well-positioned to capitalize on these industry trends through its diversified portfolio, strategic capital allocation, and strong balance sheet.
• However, the company will need to continue managing cost pressures and adapting to changes in travel demand patterns to maintain its competitive edge.