Jonathan Stanner, president and CEO of Summit Hotel Properties, Inc. (NYSE: INN), sat down for a video interview at Nareit’s REITweek: 2024 Investor Conference, held in New York from June 3-6.
Stanner emphasized that the company’s growth is primarily driven by its market mix and location exposure. He noted that approximately half of Summit’s portfolio is located in urban markets, with another 25% in suburban markets. These areas have been slower to recover but are expected to accelerate, benefiting Summit’s portfolio.
"We do think that will continue to drive outsized growth for our portfolio," Stanner said.
Stanner highlighted several key issues impacting the hotel sector over the next six to 12 months, including the health of the consumer, labor market dynamics, and interest rate fluctuations. He expressed concern about inflationary pressures and their effect on consumer spending, but noted that the company is closely monitoring these trends.
"We're starting to see some thawing of the labor market that has been a real headwind for us over the past couple of years," he said, emphasizing the importance of managing wage expenses.
Regarding acquisitions and property disposals, Stanner revealed that Summit has been a net seller over the past year, selling nine hotels for approximately $140 million. The focus has been on divesting lower-quality assets with significant capital needs and using the proceeds to deleverage the balance sheet. However, he noted that Summit remains disciplined in its acquisition strategy, seeking assets with attractive yield profiles and strategic value.
"We'd like to continue to be active, but we haven't found the opportunities that we're looking for," he said.