Summit Hotel Properties, Inc. reported its financial results for the third quarter and the nine months ended September 30, 2024, highlighting a mixed performance in revenue and profitability compared to the previous fiscal period.
For the three months ended September 30, 2024, total revenues decreased to $176.8 million from $181.8 million in the same period of 2023, reflecting a 2.8% decline. Room revenues also fell by 2.7% to $157.4 million. However, for the nine months ended September 30, 2024, total revenues slightly increased to $558.9 million from $558.7 million year-over-year. The company attributed the decline in quarterly revenues to the sale of five lodging properties, which reduced the total number of properties from 101 to 96.
Total expenses for the third quarter decreased to $161.1 million from $165.3 million in 2023, while for the nine-month period, expenses fell to $491.8 million from $500.0 million. Operating income for the third quarter was $15.8 million, down from $16.5 million, but for the nine months, it rose significantly to $95.5 million from $58.4 million in the prior year. Net income for the third quarter improved to a loss of $3.6 million, compared to a loss of $5.8 million in 2023. For the nine months, net income was $38.0 million, a substantial recovery from a loss of $6.8 million in the same period last year.
The company’s Funds From Operations (FFO) for the third quarter was $23.1 million, slightly up from $22.7 million, while Adjusted Funds From Operations (AFFO) increased to $27.6 million from $26.5 million. For the nine months, FFO rose to $83.6 million from $72.6 million, and AFFO increased to $94.0 million from $86.0 million.
Strategically, Summit Hotel Properties sold several properties, including a portfolio of two hotels in New Orleans for $73.0 million and the Hilton Garden Inn in Bryan, TX for $11.0 million. The company also entered into a purchase agreement for the Four Points by Marriott San Francisco Airport hotel, expected to close in October 2024.
As of September 30, 2024, total assets held for sale decreased significantly to $18.2 million from $65.3 million at the end of 2023. The company’s total liabilities also declined to $1.5 billion from $1.6 billion, while total stockholders’ equity remained relatively stable at $911.4 million.
Overall, while Summit Hotel Properties faced challenges in revenue generation due to property sales, it demonstrated improved profitability metrics and effective expense management, contributing to a positive outlook for the remainder of the fiscal year.
About Summit Hotel Properties, Inc.
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