Summit Hotel Properties, Inc. Q4 FY2024 earnings call

• 2024 was a successful year with full year AFFO per share growth of nearly 6%, RevPAR growth exceeding industry average for third consecutive year. • Transaction activity: Acquired Hampton Inn Boston-Logan Airport and Hilton Garden Inn Tysons Corner for $96M, sold 10 hotels for nearly $150M gross proceeds. • Balance sheet: Deleveraged by nearly a full turn of EBITDA, grown adjusted EBITDA by over 6%, increased common dividend by nearly 40%. • Capital expenditures: Investing in high ROI projects like Courtyard Fort Lauderdale Beach Hotel renovation, expected to drive incremental EBITDA.

In 2024, the urban and suburban portfolios saw RevPAR growth of nearly 3% and 4% respectively, outpacing the total industry. Resort and small-town metro assets had modest RevPAR decline year-over-year, but adjusted for certain assets, was flat. Full year pro forma RevPAR was 1.8%, pro forma hotel EBITDA increased 2%, and AFFO per share grew nearly 6%. The urban and suburban portfolios' RevPAR growth was driven by robust group demand, with RevPAR increasing 10% and 12% respectively over 2023. Resort and small-town metro assets were impacted by Hurricane Helene and a hotel repositioning, but adjusted for these, RevPAR was flat to 2023.

• Full year 2025 RevPAR growth expected to be 1% to 3%. • Adjusted EBITDA range $184M to $198M. • Adjusted FFO range $0.90 to $1 per share. • Midpoint of RevPAR guidance expects hotel EBITDA margins to contract 50 to 100 basis points year-over-year, incorporating ~30 basis points headwinds from higher property taxes. • Pro rata interest expense (excluding amortization of deferred financing costs) expected $50M to $55M, Series E and F preferred dividends $15.9M, Series Z preferred distributions $2.6M, pro rata capital expenditures $65M to $85M.

• Weather disruptions impacting RevPAR, e.g., January winter storms causing airport closures. • Property tax headwinds affecting hotel EBITDA margins. • Labor market changes, including potential impact on labor costs and availability. • Macroeconomic uncertainties affecting lodging industry demand and transaction activity.

Q: RJ Milligan asked about conversations with GIC and their appetite to grow the JV in 2025.

A: Jon Stanner said GIC is a great partner, 41 assets in the venture, and they have continued appetite to grow the joint venture.

Q: Trey Conkling was asked about what needs to happen for more meaningful transaction activity.

A: Trey Conkling stated that capital markets are constructive, with accessible financing for transactions at mid-8 to 9 cap rates, and a solid spread between financing and buying, expecting tone to improve transaction activity.