Summit Hotel Properties Posts $11.3M Q3 Loss

Despite a dip in performance, the company strengthened its balance sheet through asset sales and refinancing.

November 05, 2025

Quarterly Results Show Pressure on Rates and Revenue

Summit Hotel Properties reported a net loss of $11.3 million for Q3 2025, a steeper loss than the $4.3 million recorded during the same period last year. Lower government-related travel and reduced international demand weighed on pricing, leading to weaker top-line results.

Same store RevPAR declined 3.7% to $115.77, with average daily rate (ADR) slipping 3.4% to $157.62. Occupancy remained largely unchanged at 73.5%. Looking at pro forma figures, which reflect all properties held throughout the quarter, RevPAR dropped 4.2% to $116.57. ADR landed at $158.25, and occupancy eased slightly to 73.7%.

Profitability metrics reflected similar softness. Pro forma hotel EBITDA fell to $54.1 million from $62.2 million in Q3 2024, with margins compressing by 351 basis points to 30.6%. Adjusted EBITDAre came in at $39.3 million. Adjusted funds from operations (AFFO) dropped to $21.3 million, or $0.17 per diluted share, from $27.6 million and $0.22 in the prior-year quarter.

Year-to-date results also showed downward movement. Through September, Summit posted a net loss of $17.6 million, compared to $24.5 million in net income a year earlier. Pro forma RevPAR for the period was down 2.4% to $123.42, while pro forma hotel EBITDA decreased to $188.1 million and margins narrowed to 33.9%.

Strategic Moves to Reinforce the Balance Sheet

Despite softer fundamentals, the company executed on several financial and strategic initiatives during and after the quarter. In October, Summit sold two hotels—Courtyard Kansas City Country Club Plaza and Courtyard Amarillo Downtown—for a combined $39 million. These properties had RevPAR figures nearly 27% below the broader portfolio. Proceeds were allocated to debt reduction and liquidity enhancements.

This sale brought Summit’s total disposition activity since 2023 to 12 hotels, generating $187 million in gross proceeds. The ongoing strategy focuses on cycling out of underperforming assets and reallocating capital toward stronger-performing segments.

Refinancing and Liquidity Update

In July, Summit and its joint venture partner GIC refinanced a $400 million term loan, extending maturity to 2030 and cutting the interest spread by 50 basis points. As of September 30, total outstanding debt stood at $1.1 billion, with 75% of it hedged through interest rate derivatives. Liquidity remained solid, with over $280 million available, including $33.8 million in unrestricted cash.

Outlook and Guidance

Management expects RevPAR in Q4 to decline between 2.0% and 2.5% year-over-year but anticipates a modest sequential improvement over the second and third quarters. Capital expenditures for 2025 are projected between $60 million and $65 million on a pro rata basis.

Summit continues to focus on optimizing its portfolio and protecting its balance sheet. While demand recovery is uneven, the company remains positioned to act as market conditions evolve.