Summit Hotel Properties expects improved performance after first quarter
A drop-off in international inbound demand to the U.S. coupled with much less government demand were major headwinds for Summit Hotel Properties in 2025.
On a same-store basis, Summit's hotel revenue per available room declined 1.6% to $115.34 year over year in the fourth quarter while average daily rate dipped 1% to $162.69 and hotel occupancy fell 0.6% to 70.9%. For the full-year, Summit's same-store RevPAR declined 1.8% to $121.73 year over year, ADR decreased 1.7% to $165.22 and occupancy was flat at 73.7%. Summit President and CEO Jonathan Stanner said despite the down year, hotel demand stabilized across the company's portfolio in the fourth quarter and the challenges the REIT faced in 2025 should be less of a factor in the new year.
Yet some of those demand headwinds are likely to still be a factor in the first quarter of 2026, Stanner said on his company's fourth-quarter and full-year 2025 earnings conference call.
January RevPAR declined approximately 3% despite a strong start to the month, as Winter Storm Fern created significant disruption across Summit's portfolio, he said.
"We also face difficult comparisons in the quarter, as our first quarter last year benefited from incremental demand created by natural disasters in Florida and California and Super Bowl 59 being hosted in New Orleans, where we have six hotels," he said.
February is the company's most difficult comparison of the first quarter as portfolio RevPAR increased over 7% last year, he said. Additionally, the majority of the first quarter of 2025 was insulated from the significant reduction in government demand experienced for the remainder of the year.
But things are looking up for the hotel REIT the rest of the year. Summit has hotels in six of 11 U.S. cities that will host World Cup matches this summer.
"We're very constructive around the World Cup. I do think the industry has tempered expectations to some extent, around what that will actually drive. ... [but] I'd emphasize a couple things. One, we've got exposure in about 60% of the matches domestically," Stanner said.
In terms of hotel demand directly related to World Cup games, Stanner predicted the biggest windfall to Summit's portfolio could be in its southern U.S. markets.
"I think the biggest impacts, positive impacts for us will come in markets like Atlanta, Miami and Dallas, but we also expect to see some lift in a market like Orlando, where people will kind of tack on an extra trip in South Florida, potentially from Miami," he said.
Summit's 2026 outlook projects pro forma revenue per available room between flat performance at the low end and 3% growth at the high end. The REIT anticipates adjusted earnings before interest, taxes, depreciation and amortization for real estate between $167 million and $181 million.
Overall, Summit executives believe the company's distribution strategy will be beneficial in drawing in highly rated hotel demand across the summer months regardless if government travel demand doesn't recover, Stanner said.
"The pressure we saw in RevPAR particularly in the second and third quarter last year was so much driven by the pullback in government and international inbound demand," he said. "And part of the knock-on effects of that was it forced us to remix our business, and part of that remixing was into lower-rated channels, particularly lower-rated leisure travels, more [online travel agency] exposure, more advanced-purchase exposure. We definitely tried to create a layer of group and advanced purchase demand. I think we were successful doing that.
"What's given us some encouragement is while we were still down in the fourth quarter, and we expect the first quarter to still have these government-driven headwinds, we've been forced to do less remixing, and we are seeing a little bit more stability and growth in some of these other segments, and obviously we're going to get to a point where we lap the very difficult government comparisons. ... I wouldn't say we've seen any significant widening of the booking window at this point, [but] we feel like there is more and more incremental demand that's helping offset some of the fall of the government segment in particular."
In the fourth quarter, Summit sold a two-hotel portfolio for $39 million, and the two hotels included were the Courtyard by Marriott Kansas City Country Club Plaza for $19 million and the Courtyard by Marriott Amarillo Downtown in Amarillo, Texas, for $20 million. The Kansas City Courtyard hotel is being converted by its new owners into The Park Hotel on the Plaza Kansas City, Tapestry by Hilton, while the Amarillo property was part of Summit's joint-venture portfolio with GIC.
Summit also sold another of its GIC joint-venture properties earlier this month — the Hilton Garden Inn Longview Texas — for $12.3 million. Since 2023, Summit and its affiliates have sold a total of 13 hotels for approximately $200 million combined at a 4.6% blended cap rate. As of Feb. 25, Summit's portfolio includes 94 hotels in 24 states with a total of 14,226 rooms. Fifty-two of those hotels in its portfolio are wholly owned by the REIT.
Earnings performance
In the fourth quarter, Summit Hotel Properties' total revenue was $174.96 million, up 1.2% year over year, according to its earnings release. The REIT reported a net loss of nearly $2.6 million during the quarter, down from $916,000 net income in the fourth quarter of 2024. For full-year 2025, Summit's total revenue was $729.5 million, down 0.3% from 2024. The company reported a 2025 net loss of nearly $11.7 million, compared to 2024 net income of almost $38.9 million.
Summit's same-store hotel earnings before interest, taxes, depreciation, and amortization decreased to $53.5 million in the fourth quarter from $57.3 million in the same quarter in 2024. Adjusted EBITDA for real estate decreased to $39.7 million compared to $42.1 million in the fourth quarter of 2024. For the full year, Summit's same-store hotel EBITDA was $234.7 million, down from $253.4 million in 2024, and adjusted EBITDA for real estate decreased to $174.8 million in 2025 from $192.2 million the year before.
As of press time, Summit’s stock was trading at $4.68 per share, down 25.2% year over year. The NYSE Composite Index was up 18% for the same period.
How will violence impact Mexico tourism?
Update on the situation following cartel leader killing and thoughts on the potential impact on the tourism market.
MEXICO – Following the killing of Jalisco New Generation Cartel (CJNG) leader Nemesio “El Mencho” Oseguera Cervantes on February 22, retaliatory cartel violence has caused travel disruptions across Mexico.
The U.S. Embassy initially issued shelter-in-place orders for several tourist destinations, especially Puerto Vallarta and Guadalajara, while other regions of the country appear largely unaffected. Riviera Nayarit region, which includes destinations like Nuevo Vallarta, Sayulita, and Punta Mita, also has been affected by the violence. Mazatlán, a popular resort town on Mexico’s Pacific coast, has also seen disruptions.
On Tuesday, U.S. tourists were evacuating parts of Mexico after the U.S. State Department relaxed its advisory.
Mexico’s Jalisco state government said on Tuesday that “order and stability have been restored” to the state’s main tourist areas, including Puerto Vallarta and the Guadalajara metro area.
Ricardo Trevilla Trejo, Mexico’s secretary of National Defense, said that 2,500 reinforcements had been sent to Jalisco, meaning roughly 7,000 military personnel were in the state on Monday to maintain control.
An alert from the U.S. embassy on Tuesday said that public transportation and business continued to return to normal operations, and that flight schedules had returned to normal in Guadalajara and many airlines had extra flights planned in Puerto Vallarta. Grupo Aeroportuario del Pacifico, operator of the Puerto Vallarta and Guadalajara airports, said they were operating 95% and 96% of scheduled flights, respectively.
In a statement from Monday night, the Jalisco government said a strong operational presence from Mexico’s Navy, National Defense Secretariat, National Guard and State Public Security Secretariat enabled the partial recovery of mobility and “guaranteed conditions of calm for residents and visitors.”
“Puerto Vallarta is in safe conditions, with a strong presence of federal and state forces ready to respond to any possible contingency,” it said. “Visitors have been safeguarded and properly assisted by hotels, the airport and tourism establishments.”
The bigger question is how long will the violence last and how will it impact tourism across the country as headlines continue to show large-scale coordinated attacks in Jalisco state, including at the Pacific resort of Puerto Vallarta and the World Cup host city of Guadalajara?
One major Mexican hotel company executive told Hotel Investment Today they are monitoring the situation day by day and operations remain largely business as usual, with no major issues to report at this stage.
Hotel consultant John McCarthy of Leisure Partners in Mexico City said late Monday, “It’s probably too soon to assess any real impact on hotel performance.”
McCarthy said at the time that the next 36 to 48 hours would be critical in demonstrating that the government maintains “absolute control over the situation.”
“From what we know so far, the perpetrators achieved maximum media impact but without loss of civilian life – at least none that has been reported,” McCarthy said. “If that remains the case, this will likely be seen not as a destabilizing event, but as a strong and decisive action by President Claudia Sheinbaum and her administration.”
McCarthy said tourism markets tend to react more to prolonged instability than to isolated incidents. “If the response continues to be firm and effective, the long-term effect on Puerto Vallarta and Mexico’s broader hotel sector should be minimal,” he said.
Reports suggest the highly visited states of Yucatan, Quintana Roo and Oaxaca are not among Mexico’s hotspots of violence. Mexico City does not rank among the most violent states either.
There were reports of narco roadblocks and arson attacks against businesses in Cozumel, Playa del Carmen, Tulum, and Cancun. But there do not appear to be any reports of targeted violence against tourists.
Cancún was reportedly facing moderate disruptions with flight delays and some violence in the area, but resorts remain open for tourists. Travelers are being advised to avoid off-property excursions.
Mexico City is under heightened security, with airport and transportation disruptions affecting travelers. However, tourist areas remain open and secure.
Cozumel is experiencing some localized incidents but remains largely unaffected, though cruise port operations are uncertain. U.S. Embassy advisories are in place.
Los Cabos is completely unaffected, with all operations running as usual.
Truist Securities reported that Hyatt Hotels Corp. has the highest exposure to both Mexico and Jalisco among the major public hotel companies in the U.S., followed by Marriott with Hilton, Wyndham, and Choice having much less exposure.
Using data from CoStar Truist estimated that Hyatt’s total rooms exposure to Mexico is ~8.5% and Jalisco represents approximately ~1.0% of total rooms exposure. Marriott’s Mexico exposure is ~3.3% of rooms and Jalisco is ~0.4% of rooms.
Tourism in Mexico has been on the rise. The country reportedly welcomed a record 47.4 million visitors between January and July 2025 — a 13.8% increase on the same period in 2024.
Do Not Travel to the United States Right Now, Warns Detained British Tourist
Karen recounted the nightmarish experience to The Guardian. After several weeks traveling across the U.S., the couple was crossing the border to Canada on Sept. 26 when they were informed they did not have the proper paperwork to bring the car. They were sent back to Montana, where U.S. border officials detained them. Bill’s U.S. visa had expired, but Karen’s was still valid. Yet both were shackled and taken to Montana’s Sweetgrass border patrol station after waiting all day at an office. The couple spent three days there, sleeping on the floor, despite offering to pay for their own flights home.
Bill had worked in the U.S. with a work permit, but he decided to retire in the U.K. after a lengthy appeals process for a green card. What’s perplexing about her detention is that Karen had a valid visa. She does not have any criminal conviction—not even a parking ticket—and she did not break any laws while traveling through the country. “There was no reason to hold me,” she said.
Karen was told she was guilty by association because she helped her husband pack for the trip. “It just went from crazy to ridiculous. It felt like they just wanted an excuse to detain me.”
An agent informed the couple they could self-deport and the process would be over quickly due to the relationship between the U.S. and the U.K. They would have to sign a document waiving their rights to a judge, and they would be banned from the U.S. for 10 years. They agreed.
However, instead of a flight home, they were shackled again and transported to the Northwest ICE Processing Center in Tacoma, Washington, where they were separated. Karen slept on the floor for a month because she couldn’t climb to a bunk bed, and suffered from constipation. Eventually, she called her son from the detention center in October, but the U.K. Foreign Office had informed him they couldn’t be released while the federal government was in a shutdown.
Meanwhile, Karen spoke with staff at the detention facility who were also bewildered by her presence. From them, she learned that ICE agents receive bonuses for detaining people. “There is all the incentive in the world to find a reason—any reason—not to let someone go,” a claim that ICE has denied to The Guardian.
Then, on Nov. 6, the couple was suddenly released and reunited. The agents handcuffed them and took them to the airport. When they arrived home, their houseplants were dead, and their credit score suffered due to two months of missed payments. Their luggage has not been returned, and she’s still catching up on emails.
After spending six weeks in detention centers, the retired primary school worker has a warning for travelers: “Don’t go—not with Trump in charge. It’s totally out of control over there. There’s no accountability. They don’t seem to need a reason for detaining you.” She is especially worried for young travelers who may be visiting for FIFA World Cup events in the U.S. and might get into trouble. “If it can happen to me, it can happen to anybody.”
Related: Medical Emergency Lands Irish Tourist in ICE Detention for 100 Days
Reports of arbitrary detention and eviction of tourists have become more common since President Donald Trump took office. Despite claims that federal agents are arresting criminals, innocent people—including citizens and tourists—are increasingly caught up in the process without just cause or due process.
A British graphic artist spent 19 days in detention before her story was published internationally. Two German tourists were detained for weeks without explanation when they tried to enter the U.S. last year, while a French tourist was denied entry for criticism of Trump’s policies, and a Norwegian tourist was banned due to an unflattering meme of U.S. Vice President JD Vance.
Along with heightened scrutiny at the border, the Trump administration has introduced tourist-unfriendly policies that are impacting arrival numbers. The administration has increased visa fees for tourists and now requires visa-exempt travelers to share their social media history. Meanwhile, the Department of Homeland Security is using force to crack down on immigration protests, drawing backlash globally. Many organizations are advising against travel to certain states in the U.S. where ICE agents have expanded their activities.
Related: United States Tourism Numbers Slump While These Destinations Surge, Says New Report
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