SUMMIT HOTEL PROPERTIES REPORTS FOURTH QUARTER AND FULL YEAR 2025 RESULTS

Core Insights - Summit Hotel Properties reported a stabilization in demand across its portfolio in Q4 2025, with RevPAR growth improving by 240 basis points sequentially despite challenges from lower international travel and government demand due to a prolonged government shutdown [1][2] - The company is optimistic about 2026, anticipating strengthened fundamentals supported by special event demand, including World Cup matches, and growth in corporate transient and group demand [1][2] - The capital recycling program continued with the sale of non-core hotels, generating over $51 million in gross proceeds and eliminating approximately $13 million in near-term capital expenditures [1][2] Fourth Quarter 2025 Summary - Adjusted FFO decreased to $22.3 million, or $0.18 per diluted share, from $25.2 million, or $0.20 per diluted share in Q4 2024 [1][2] - Adjusted EBITDAre fell to $39.7 million from $42.1 million in Q4 2024 [1][2] - Pro forma RevPAR decreased by 1.8% to $115.58, with pro forma ADR down 1.1% to $162.66 and occupancy down 0.7% to 71.1% [1][2] Full Year 2025 Summary - Adjusted FFO for the full year decreased to $103.6 million, or $0.85 per diluted share, compared to $119.2 million, or $0.96 per diluted share in 2024 [1][2] - Adjusted EBITDAre decreased to $174.8 million from $192.2 million in 2024 [1][2] - Pro forma RevPAR decreased by 2.2% to $121.85, with pro forma ADR down 1.8% to $165.28 and occupancy down 0.4% to 73.7% [1][2] Transaction Activity - In February 2026, the company sold the Hilton Garden Inn Longview for $12.3 million, representing a 6.7% capitalization rate [2] - In October 2025, two hotels were sold for a combined $39 million, with a blended capitalization rate of 4.3% [2] - Since 2023, the company has sold 13 hotels for approximately $200 million at a blended capitalization rate of about 4.6% [2] Capital Markets Activity - The company fully repaid $287.5 million in Convertible Notes using a $275 million Delayed Draw Term Loan [2] - An interest rate swap was entered into for $125 million to fix one-month term SOFR at 3.31% until December 2027 [2] Balance Sheet Summary - As of December 31, 2025, the company had unrestricted cash of $30.1 million and outstanding debt of $1.1 billion with a weighted average interest rate of 4.48% [2] - 77% of the outstanding debt had a fixed interest rate, while 23% had a variable interest rate [2] Dividend Declaration - A quarterly cash dividend of $0.08 per share was declared, representing an annualized yield of 7.7% [2] - Additional dividends were declared on preferred units and shares [2] 2026 Outlook - The company projects pro forma RevPAR growth between 0.00% and 3.00% for 2026 [2] - Adjusted EBITDAre is expected to be between $167 million and $181 million, with Adjusted FFO projected between $89 million and $103.5 million [2]