Jonathan Stanner, president and CEO of Summit Hotel Properties, Inc. (NYSE: INN), sat down for a video interview during Nareit’s REITworld: 2024 Annual Conference in Las Vegas, Nevada on Nov. 18-21.
Stanner discussed the company's recent portfolio review and future outlook. Over the past 18 months, Summit has sold 10 hotels for $150 million, focusing dispositions on properties with lower revenue per available room (RevPAR), higher capital expenditure (capex) needs, and lower margins. The sales, which were made at relatively low capitalization rates, were aimed at reducing deferred capex and preparing for future growth. The REIT has successfully deleveraged its balance sheet, creating capacity for further expansion, he noted.
Stanner also highlighed specific geographic markets that have shown strong performance. Urban markets, in particular, have experienced better midweek growth, with Silicon Valley, Minneapolis, Baltimore, Louisville, and New Orleans seeing significant RevPAR and EBITDA growth. These markets, recovering from low baselines, offer strong growth prospects moving forward.
Looking to 2025, Stanner expects a similar operating environment, with low single-digit RevPAR growth and potential for rising expenses. However, he is optimistic about Summit's performance, noting that the company's portfolio is well-positioned, particularly in urban and suburban markets, which represent 75% of its assets. With strong expectations for the group calendar and business transient demand, Summit anticipates continued growth, especially as segments that lagged in recovery continue to improve.