Summit Hotel Properties (NYSE:INN) executives said the company ended 2025 with improving demand trends and continued to lean on market share gains, cost controls, and balance sheet actions to navigate what management described as a “complex and challenging operating environment.” Speaking on the company’s fourth-quarter earnings call, President and CEO Jonathan Stanner and CFO Trey Conkling highlighted sequential improvement in RevPAR trends late in the year, ongoing headwinds tied to government and inbound international demand, and an initial 2026 outlook that calls for modest top-line growth.
Fourth-quarter demand improved sequentially, but government and international travel weighed on results
Stanner said fourth-quarter demand showed “an encouraging positive inflection” compared to the second and third quarters of 2025. Same-store RevPAR declined 1.6% in the quarter, with RevPAR trends improving sequentially by more than 200 basis points, according to management.
Both executives pointed to government and inbound international demand as a key drag. Stanner said those segments, which together represent about 10% to 15% of total room nights across the portfolio, declined around 20% on a blended basis during the quarter. Excluding government and international inbound segments, Stanner said fourth-quarter RevPAR increased roughly 60 basis points year over year.
Despite the revenue pressure, management emphasized market share gains. Stanner said the company’s fourth-quarter RevPAR index improved by 220 basis points to 117 and described the portfolio as approaching, and in many markets surpassing, post-pandemic market share highs.
Market highlights included San Francisco, Orlando, and South Florida
Conkling said several core markets showed strength in the fourth quarter, including San Francisco, Orlando, South Florida, and Nashville.
- San Francisco: Conkling said Summit’s San Francisco hotels produced RevPAR growth of more than 40% year over year, helped by citywide conventions and events. He cited Dreamforce (which shifted into the fourth quarter) and Microsoft Ignite as contributors at the company’s Fisherman’s Wharf and Oyster Point properties, and he noted continued strength at Hilton Garden Inn Milpitas. Management expects the market to remain strong in 2026, driven by citywide events and improving business travel, along with broader Bay Area activity around Super Bowl LX and the FIFA World Cup.
- Orlando: Conkling said RevPAR increased 9% in the fourth quarter, as the company shifted away from advanced purchase rates toward higher-rated retail channels. He also said the portfolio’s three Orlando assets are benefiting from the recently opened Epic Universe Park, which is driving growth in leisure and group segments.
- South Florida: Conkling said fourth-quarter RevPAR grew 4% in the region, supported by leisure, corporate, and special events demand. He highlighted strong performance at the newly renovated Oceanside Fort Lauderdale Beach, where he said fourth-quarter RevPAR, total revenue, and gross operating profit rose 9%, 39%, and 53%, respectively.
Full-year 2025 results and expense management
For the full year, Stanner said same-store RevPAR declined 1.8%, driven “predominantly by lower average daily rates” amid a shift toward lower-rated demand segments after government demand began to fall sharply starting late in the first quarter.
Conkling reported full-year 2025 adjusted EBITDA of $174.8 million and adjusted FFO of $0.85 per share. He also said the company held expense growth to about 2% year over year in the pro forma portfolio, pointing to wage management initiatives, reduced contract labor, and improved retention. Contract labor declined nearly 9% for the year and represented less than 10% of total labor costs, which management said is nearing pre-pandemic levels. Conkling added that turnover at year-end 2025 fell about 24% compared with year-end 2024.
On capital spending, Conkling said the company invested about $75 million across the portfolio on a consolidated basis during 2025, including renovations at Oceanside Fort Lauderdale Beach and several other properties. For 2026, Summit guided to pro rata capital expenditures of $55 million to $65 million, which Conkling said reflects a reduction from elevated spending levels in 2022 through 2024.
Capital recycling and balance sheet actions
Management also reviewed dispositions completed in late 2025 and early 2026. Stanner said Summit sold two non-core hotels during the fourth quarter: the Courtyard Amarillo Downtown (owned in a joint venture with GIC) and the wholly owned Courtyard Kansas City Country Club Plaza. The two sales generated $39 million of aggregate gross proceeds and reflected a blended yield of 4.3% based on trailing 12-month NOI, after considering roughly $10 million of foregone near-term capital expenditures.
In addition, Stanner said the company closed “last week” on the sale of the Hilton Garden Inn in Longview, Texas for $12.3 million, representing a 6.7% cap rate based on estimated trailing 12-month NOI, after considering about $2.6 million of foregone near-term capital expenditures. Stanner said the three assets had a blended RevPAR of $89, roughly 30% below the current pro forma portfolio.
Conkling said that after year-end the company drew a $275 million delayed draw term loan to retire $288 million of 1.5% convertible senior notes that matured in mid-February. Pro forma for that refinancing, Conkling said Summit has no debt maturities until 2028. He also said the company’s average interest rate is 5.5% with an average length to maturity of nearly four years.
The company’s board declared a quarterly common dividend of $0.08 per share on Jan. 22, 2026. Conkling said that equates to an annualized dividend of $0.32 per share and a dividend yield of about 7.7% based on that annualized amount.
2026 outlook: modest RevPAR growth, World Cup exposure, and a tough first quarter
Summit introduced full-year 2026 guidance calling for RevPAR growth of 0% to 3%, adjusted EBITDA of $167 million to $181 million, and adjusted FFO of $0.73 to $0.85 per share. Conkling said the outlook assumes margins are flat to down 100 basis points, with operating expenses up 2% to 3% year over year and about 25 basis points of headwinds from higher property taxes. The company expects pro rata interest expense of $57 million to $61 million, including about $9 million of incremental interest expense tied to refinancing the convertible notes.
Stanner said 2026 should benefit from low levels of new lodging supply and easing comparisons for government-related demand beginning in the second quarter. He also said Summit expects the FIFA World Cup to be a tailwind, noting exposure to six host markets that account for nearly 60% of domestic matches. In response to a question, Stanner estimated the World Cup could contribute roughly 50 to 75 basis points to full-year RevPAR expectations, with notable impacts expected in Atlanta, Miami, and Dallas.
Management cautioned that the first quarter is expected to be the most difficult. Stanner said January RevPAR fell about 3% after Winter Storm Fern disrupted travel, and he pointed to tough comparisons from prior-year demand tied to natural disasters in Florida and California and Super Bowl LIX in New Orleans, where Summit has six hotels. However, he said March pace improved to around flat to slightly positive, and April pace was up mid-single digits.
About Summit Hotel Properties (NYSE:INN)
Summit Hotel Properties is a real estate investment trust (REIT) that acquires, owns and operates branded select-service hotels and extended-stay properties across the United States. The company focuses on upper-midscale and upscale lodging segments, targeting established national brands to combine the operational efficiencies of limited-service properties with strong franchise affiliation.
The company’s portfolio comprises over thirty hotels carrying well-known flags such as Marriott, Hilton, Hyatt and IHG.
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