Summit Hotel Properties, Inc. (NYSE:INN) Q1 2018 Earnings Conference Call - Final Transcript
May 03, 2018 • 09:00 am ET
Good day, ladies and gentleman, and welcome to the Summit Hotel Properties, Inc. Q1 2018 Earnings Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. (Operator Instructions) As a reminder, this conference is being recorded.
I would like to introduce your host for today's conference, Adam Wudel, Senior Vice President of Finance. You may begin.
Thank you and good morning. I am joined today by Summit Hotel Properties Chairman, President and Chief Executive Officer, Dan Hansen, and Executive Vice President and Chief Financial Officer, Jon Stanner.
Please note that many of our comments today are considered forward-looking statements as defined by Federal securities laws. These statements are subject to risks and uncertainties both known and unknown as described in our 2017 Form 10-K and other SEC filings. Forward-looking statements that we make today are effective only as of today, May 3, 2018, and we undertake no duty to update them later. You can find copies of our SEC filings and earnings release, which contain reconciliations to non-GAAP financial measures referenced on this call, on our website at www.shpreit.com.
Please welcome Summit Hotel Properties Chairman, President, and Chief Executive Officer, Dan Hansen.
Daniel P. Hansen
Thanks, Adam, and thank you all for joining us today for our first quarter 2018 earnings conference call.
We are very pleased by the strong earnings performance of our portfolio this past quarter that drove both top and bottom line results to the high end of our guidance range. A number of factors contributed to our positive first quarter results, including continued strong leisure and group demand, an encouraging pickup in corporate demand, and continued natural disaster-related business.
For the first quarter, we recorded adjusted FFO of $32.1 million, an increase of 6.5% as compared to the first quarter of 2017. Our adjusted FFO of $0.31 per share came in at the high end of our guidance range of $0.28 to $0.31 per share. On a pro forma basis, we reported RevPAR growth of 2.1% for the quarter, which was driven by a 1.2% increase in rate and a 0.9% increase in occupancy and includes approximately 100 basis points of CapEx displacement related to four hotels that had guestrooms out of service for the renovation during the quarter. Strength in RevPAR growth was evident in numerous markets across our portfolio, with a few of the largest outperformers being Minneapolis, Indianapolis, and Miami.
Our Minneapolis hotels performed extremely well, benefiting from exceptionally strong demand related to the Super Bowl. Our six Minneapolis hotels combined to post RevPAR growth of 27.2% for the quarter, led by our Hyatt Place located only three blocks from US Bank Stadium that produced impressive RevPAR growth of 41.3%.
Our two Indianapolis hotels continue to ramp following successful renovations, implementation of new group strategies, and an improving convention calendar. Combined, these two hotels had RevPAR growth of 10.1% during the quarter and, once again, outperformed the competitive set and the broader