Summit Hotel Properties, Inc. · NYSE:INN
Summit Hotel Properties — Investor Presentation (September 2024)
32 slides from Summit Hotel Properties's investor presentation, September 2024
Slide 1: September 2024
SEPTEMBER 2024 – Austin Downtown – Miami Brickell
Slide 2: Forward-looking statements
We make forward-looking statements in this presentation that are subject to risks and uncertainties. These forward-looking statements include information about possible or assumed future results of our business, financial condition, liquidity, results of operations, plans, and objectives. When we us
Slide 3: Summit Hotel Properties (NYSE: INN) at a glance
(NYSE: INN) Lodging Assets (1) Guestrooms (1) Markets (1) Top 50 Markets (2) Recent Dispositions Marriott, Hyatt, Hilton (2) GOP Margin (1,3) Portfolio RevPAR Index (1,4) – Miami Brickell 1. Based on 96 lodging assets owned as of July 31, 2024. 2. Based on guestroom count for the 96 lodging assets o
Slide 4: Summit
SUMMIT 4 – Houston Downtown
Slide 5: Second quarter 2024 highlights
• Occupancy: 77.7% (+2.4%); ADR: $170 (+0.9%); RevPAR: $132 (+3.4%) • Select recovering markets achieved 11% RevPAR growth and 37% hotel EBITDA growth (New Orleans, Baltimore, Minneapolis, and Louisville) • The NewcrestImage portfolio continues to produce strong results: • RevPAR growth +3%; hotel E
Slide 6: 2024 Outlook
20 24 O UTLO O K Full Year 2024 Low High Pro Forma RevPAR Growth (1) 1.00% 2.50% Adjusted EBITDA $188,000 $196,000 Adjusted FFO $112,000 $122,000 Adjusted FFO per Diluted Unit $0.91 $0.99 Capital Expenditures, Pro Rata $65,000 $85,000 • July & August preliminary average pro forma RevPAR growth range
Slide 7: Urban market recovery opportunity
Summit is positioned for continued relative outperformance given its exposure to several urban markets that have been slower to recover to pre-pandemic levels. In aggregate, these five markets had second quarter 2024 RevPAR growth and hotel EBITDA growth of 6% and 22%, respectively. Q2 2024 Recovery
Slide 8: Weekday performance and RevPAR recapture
% of Portfolio by 4% STR Location (1) 11% Urban 12% The greatest opportunity for further RevPAR acceleration is from weekday Suburban 48% performance improvement, particularly related to the urban location type driven by Airport growth in business transient and group demand. Resort Q2 2024 RevPAR (2
Slide 9: Summit
SUMMIT 9 – Dallas Frisco Station
Slide 10: Investment highlights
Efficient operating model & best-in- class platform drives profitability Premier portfolio with broad geographic diversification and concentration in high growth sun belt markets Targeted capital allocation strategy with proven track record of external growth and capital recycling Well-positioned ba
Slide 11: Operating platform built on expertise in revenue and asset management
Summit’s operating platform is built on its expertise and experience in revenue and asset management, design and construction, and capital allocation all underpinned by robust business intelligence and data analytics • Consistent on-site presence and • Deep network of industry relationships • Intens
Slide 12: Efficient operating model drives profitability
• Rooms revenue driven model enhances GOP and EBITDA margins • Restructuring of the operating model during the pandemic leads to lower FTE run rate going forward • Proprietary, in-house revenue management platform partners with management companies to more effectively yield manage the portfolio and
Slide 13: Cumulative RevPAR growth vs STR Upscale
Cumulative RevPAR Growth: Summit Pro Forma Portfolio vs. STR Upscale (1) Summit STR Upscale 60% 48% Summit has a track record of outperformance with cumulative RevPAR growth, exceeding the STR Upscale 40% 37% chain scale benchmark by a 150-basis point CAGR over the 12 years since the Company’s IPO.
Slide 14: T12 Hotel EBITDA margin vs peers
T12 Hotel EBITDA Margin 36.2% 34.4% 29.9% 29.1% (1) (2) (3) Summit Select-Service All Peers Full-Service Peers Peers – Atlanta Downtown 1. Summit based on the pro forma twelve-month financials ending June 30, 2024, for the 96 lodging assets owned as of July 31, 2024. 2. Select-service peer data base
Slide 15: Geographic diversification of portfolio
No single asset contributes more than 4% to our portfolio, and Dallas is the only market that contributes >10%. Portland Each individual Dallas submarket contributes <5%. (1) Boston Minneapolis U.S. # of % of Chicago Markets Rooms Portfolio (2) San Francisco Rocky Mountains Baltimore Indianapolis To
Slide 16: Chain scale breakdown and supply/demand
Summit Portfolio Chain Scale Breakdown (2) 7% 14% CBRE (1) Total US Upscale Supply Demand Supply Demand May 2024 Variance Variance Growth Growth Growth Growth 2019 1.6% 2.3% 70 bps 4.2% 4.4% 20 bps 2020 0.9% -35.2% -3,610 bps 2.7% -40.9% -4,360 bps 2021 1.0% 37.0% 3,600 bps 3.2% 47.3% 4,410 bps 79%
Slide 17: Franchisor and hotel type mix
Summit believes in the value of brand loyalty and partners with leading global brands that provide access to millions of enrolled loyalty members. We believe guests value premium standards, exceptional service, diverse types of stay offerings, and ease of reservation that result in a positive guest
Slide 18: Summit
SUMMIT 18 – New Orleans Downtown
Slide 19: Capital allocation strategy and joint venture
• Locations in “Markets that Matter” with • Own 39 hotels totaling 5,335 guestrooms with a favorable supply/demand dynamics and multiple well-respected global real estate investor demand generators further validates Summit’s platform and operating model • Efficient operating models and value-add opp
Slide 20: Acquisitions relative to lodging peers
Over the past two years, Summit has been highly acquisitive relative to the lodging peer set, setting the stage for outsized EBITDA growth over the next several years Gross Acquisition Value (1) Acquisitions as a % of TEV (2) $526 25% $261 5% INN AVG PEER INN AVG PEER 1. Amounts in millions. Complet
Slide 21: Joint venture and recent transactions
• 51% summit / 49% • Summit as General Partner & Asset Manager • Acquired Hampton Inn & Suites Silverthorne for $26MM • Acquired 4-Hotel Portfolio for $249MM • $249MM Gross Transaction Value Further validates Summit’s investment thesis and operating platform • Summit sold 49% interest to the Joint V
Slide 22: Recent acquisition highlights
RECENT Onera Summit AC / Element 2023 Recent Summit ACQUISITION Fredericksburg Same Store (1) Miami Acquisition Acquisitions Dispositions Pro Forma HIGHLIGHTS Acquisition # of Assets # of Guestrooms Date of Transaction Gross Transaction Price Price per Key Stabilized Yield (2) RevPAR Growth (3) 1. B
Slide 23: In-house renovation program
Recently Completed Renovations Ongoing & Upcoming Renovations Courtyard New Haven at Yale Courtyard Charlotte City Center Hilton Garden Inn San Jose / Milpitas Courtyard Fort Lauderdale Beach Residence Inn Portland / Hillsboro Courtyard Grapevine DFW Airport Summit’s in-house design, construction &
Slide 24: – New Orleans Metairie – Orlando Universal – Houston Energy Corridor
– New Orleans Metairie – Orlando Universal 24 – Houston Energy Corridor – Portland Downtown RiverPlace
Slide 25: Summit
SUMMIT 25 – Asheville Downtown
Slide 26: Pro forma capital structure
Pro Forma Capital Structure (1,2) Net Debt: $1.0 Billion 15% Common Equity: $0.8 Billion Pro Rata Preferred Equity: $0.3 Billion Capitalization 48% Pro Forma Debt Maturity Schedule (1) 37% Unsecured JV MR1 JV MR3 B of A Revolver Credit Facility Term Loan Term Loan Regions Convertible Mortgage JV Ter
Slide 27: Limited variable-rate debt exposure and liquidity
Limited Variable- Rate Debt Exposure (1) 81% Over 80% of pro rata debt and preferred with fixed interest rates Total variable Exceptional Liquidity Profile Minimal Near-Term Debt debt 19% Among the Industry’s Best (1,2,3,4) Maturities (1,3) Total fixed debt Only 4% of pro rata debt matures + preferr
Slide 28: Summit
SUMMIT 28 – Amarillo Downtown
Slide 29: Achieved a 15% market-based emissions intensity reduction
Over the past year, we have developed a climate action plan to achieve our emissions reduction target of 30% by year-end 2025. Our climate plan includes Contributed over $140,000 and Achieved a positive response Increased the composition of active data and energy management programs and systems to e
Slide 30: ESG goals
• Continue to improve our building • Contribute over $150,000 and 250 hours • Continued compliance with all ethics efficiencies by increasing the number of volunteer service to support our local and corporate governance of properties in our portfolio with communities in 2023. requirements in 2023. g
Slide 31: Executive leadership
President & Chief Executive Officer Mr. Stanner joined Summit Hotel Properties in April 2017 and most recently served as the company’s Executive Vice President and Chief Financial Officer. Prior to joining Summit, Mr. Stanner was Chief Executive Officer at Strategic Hotels & Resorts, a former NYSE-l
Slide 32: Summit Hotel Properties
SUMMIT HOTEL PROPERTIES
Summit Hotel Properties — Investor Presentation (September 2024) on 6ix