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.