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Ladies and gentlemen, thank you for standing by. Welcome to the Summit Hotel Properties first quarter 2026 conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you would need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would like now to turn the conference over to Kevin Milota. Please go ahead.

Thank you, operator, good morning. I am joined today by Summit Hotel Properties President and Chief Executive Officer, Jon Stanner, and Executive Vice President and Chief Financial Officer, Trey Conkling. 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 SEC filings. Forward-looking statements that we make today are effective only as of today, May 1, 2026, 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 President and Chief Executive Officer, Jon Stanner.

Thank you, Kevin, and good morning, everyone. Thank you for joining us today for our first quarter 2026 earnings conference call. We are pleased with our first quarter financial results, which were driven by a meaningful sequential improvement in operating fundamentals throughout the quarter. RevPAR in our pro forma portfolio inflected positive in the first quarter, increasing 20 basis points year-over-year, which exceeded expectations communicated during our fourth quarter 2025 earnings call by over 200 basis points. Importantly, operating strength was broad-based across the portfolio, particularly in March, with growth in multiple high-rated demand segments driving increases in average rates and RevPARs in many of our markets. Operating fundamentals improved each month as the quarter progressed.

While RevPAR declined in January and February, those declines were more than offset by 4.1% RevPAR growth in March, which was driven by a robust 5.6% increase in average rate. We were especially encouraged with March results, which represented a relatively clean calendar comparison for our portfolio, despite the lingering government shutdown and highly publicized TSA wait times. We believe March trends are more indicative of the underlying demand strength in our business and have been pleased to see these trends continue in April. While demand strength and pricing power were broad-based across our portfolio, our best performing demand segments were our highest rated segments, which allowed us to yield out a portion of lower rated business in a reversal of the prevailing pricing trends we experienced for most of last year.

In particular, the ongoing recovery in business transient travel is driving better midweek performance as RevPAR growth increased 3% for the quarter and 10% in March in our negotiated segment. This helped drive double-digit RevPAR growth in 12 of our markets in March, including urban centric markets such as Baltimore, Charlotte, Cleveland, Miami, Pittsburgh, San Francisco and Washington, D.C. As a reminder, we expected our first quarter to be the most challenging of the year, given multiple headwinds faced in our portfolio, notably a difficult Super Bowl comparison in New Orleans, where we own six hotels, and continued weakness in government demand with DOGE-related travel cuts not lapping year-over-year comparisons until the March-April time frame. In addition, disruption related to Winter Storm Fern and civil unrest in Minneapolis further reduced first quarter reported RevPAR growth.

In total, these events created an approximately 140 basis point headwind to our first quarter RevPAR growth, most significantly in January and February. Our outlook for the remainder of the year has improved, driven by strengthening demand trends that have persisted into the second quarter. We are also approaching what is expected to be a robust summer of special events driven demand. We expect April RevPAR to increase approximately 3.5%, and our second quarter revenue pace is currently trending approximately 4% ahead of the same time last year. Pace trends in June are particularly strong, supported by a favorable event calendar highlighted by our significant exposure to major demand catalysts, including the 2026 FIFA World Cup, where we have exposure to six U.S. host markets representing approximately one-third of our total room count and 44 scheduled matches.

In addition, we expect strong incremental demand from the U.S. 250th anniversary celebrations in Boston, Washington, D.C., and Baltimore, as well as several other major summer travel and event driven demand drivers. As we've discussed on previous calls, government and government-related demand has been a significant headwind for our portfolio since the creation of DOGE in the first quarter of last year. The lapping of these comparisons is expected to improve our year-over-year growth rates going forward. While first quarter government-related demand declined 12% year-over-year, this represented a meaningful improvement from the 20%+ declines we experienced through most of 2025. Encouragingly, March government revenue increased approximately 3%. Our outlook for this demand segment has improved, demonstrated by second quarter government pace currently trending up mid-single digits.

Government demand represents approximately 5%-7% of our total guest room and revenue mix. We believe this could serve as a potential modest tailwind to our year-over-year growth rates in the last three quarters of the year. Given our strong first quarter results and our improved outlook for the remainder of the year, we have increased the guidance ranges for our key operating and financial metrics, which were outlined in our earnings release yesterday. Trey will provide more details on our updated guidance ranges later in the call. We believe the revised ranges strike the appropriate balance of reflecting a more positive outlook while acknowledging that our most meaningful quarters are still ahead and macro and geopolitical uncertainty persists.

While near-term performance trends are driving our improved outlook, longer-term lodging fundamentals suggest an improved demand environment has the potential to create an extended period of attractive top-line growth. More specifically, supply growth remains meaningfully below historical averages, and still elevated construction and financing costs create an impediment to a meaningful near-term re-acceleration in construction starts. In addition, consumer prioritization of travel and experiences remains paramount, which has driven resilient leisure demand. Finally, improved industry demand has increasingly been driven by the ongoing recovery and acceleration of business travel, which uniquely benefits our urban-centric portfolio. We believe these dynamics create a favorable operating environment as we move through the balance of 2026 and beyond.

From a capital allocation standpoint, in the first quarter, we successfully closed on the previously announced sale of the 122-room Hilton Garden Inn in Longview, Texas, a non-core asset owned in our joint venture with GIC. The hotel was sold for $12.3 million, representing a 6.8% capitalization rate based on trailing 12-month NOI after consideration of foregone near-term CapEx. In April, we entered into an agreement to sell our wholly owned Courtyard and Residence Inn Dallas Arlington South hotels for a combined sale price of $19 million. The two hotels total 199 guest rooms, and the transaction reflects a 5% capitalization rate based on trailing 12-month NOI after factoring in near-term CapEx that we would otherwise have been required to fund.

We expect the Arlington transaction to close in the third quarter, which will allow us to capture the demand generated from the FIFA matches in the market. These dispositions are consistent with our ongoing strategy to selectively recycle capital out of lower growth assets, reduce future capital requirements, enhance the overall quality and growth profile of our portfolio. Proceeds from asset sales support our broader capital allocation priorities, including enhancing liquidity, reducing leverage, repurchasing shares, and maintaining the physical condition of our portfolio. During the first quarter, we remained active under our share repurchase program, repurchasing 1.4 million common shares for an aggregate purchase price of $6 million or a weighted average price of approximately $4.17 per share. As of March 31, 2026, we had approximately $29 million of remaining capacity under the program.

Since launching the program in 2025, we've repurchased approximately five million shares, representing roughly 4% of total shares outstanding at an average price of $4.26 per share. We believe these repurchases represent an attractive use of capital and reflect our continued confidence in the intrinsic value of the portfolio and the long-term earnings power of the business. In summary, we're encouraged by the start to the year and remain optimistic about the improved outlook for our industry broadly and our company specifically. While the operating environment remains dynamic, the breadth of demand improvement we are seeing across the portfolio, combined with favorable industry supply conditions, reinforces our confidence in Summit's ability to outperform as fundamentals strengthen. Our priorities are unchanged. We remain intensely focused on optimizing profitability at the property level, prudently allocating capital, and continuing to strengthen the balance sheet.

We believe this disciplined approach, supported by our high-quality portfolio and efficient operating model, positions Summit to create meaningful long-term value for shareholders. With that, I'll turn the call over to Trey to discuss our financial results for the quarter in more detail.

Thanks, Jon, and good morning, everyone. First quarter pro forma RevPAR increased 0.2% year-over-year, driven exclusively by growth in average daily rate. Strength in rate was a primary theme of the first quarter as nearly all segments generated positive growth year-over-year. In particular, the retail and negotiated segments are clearest indicators of higher rated leisure and business transient demand delivered first quarter RevPAR growth of 7% and 8% respectively, driven by strong rate performance. Furthermore, the retail and negotiated segments experienced sequential improvement across each month of the quarter, culminating with March RevPAR growth of 11% and 16% respectively. Finally, as Jon mentioned, government-related demand within our qualified segment inflected positively during the first quarter, with March RevPAR increasing approximately 3%.

Due to the relative strength of the company's first quarter operating results, RevPAR index increased to 116% of fair share. Driven by these positive RevPAR trends and strong cost controls, first quarter operating results materialized above expectations outlined during our February fourth quarter earnings call. For the first quarter, Adjusted EBITDA was $44.2 million, and Adjusted FFO was $25.5 million, or $0.21 per share. Several core markets delivered strong first quarter results, including continued strength in San Francisco and South Florida. In San Francisco, where the company owns three hotels, the market benefited from a strong citywide calendar and several high impact demand events, including the J.P. Morgan Healthcare Conference in January, Super Bowl in February, and RSA in March.

Our hotels performed exceptionally well during these peak periods, capitalizing on compression nights to drive strong top-line performance, resulting in RevPAR increasing 27% in the quarter. Looking ahead, we expect this momentum to continue in the second quarter, particularly June, supported by a strong convention and special events calendar, including several major technology conferences, Pride, and the start of the World Cup and related fan activities. In South Florida, our Miami and Fort Lauderdale hotels delivered a strong first quarter performance, with RevPAR growth exceeding 14% driven by a 9% increase in average daily rate. In Miami, operating results were supported by peak season demand, several high impact January events, including the NHL Winter Classic and the College Football Playoff National Championship, and a more condensed spring break calendar due to the shift of the Easter holiday to the first weekend in April.

Our South Florida portfolio continues to benefit from the highly successful repositioning of the Oceanside Fort Lauderdale Beach. The hotel generated 1st quarter revenue and EBITDA growth of 56% and 90% respectively, as the renovated rooms product and expanded food and beverage amenities appeal to both tourists and locals alike. Group demand also continues to accelerate at the Oceanside, given the property's location adjacent to the Fort Lauderdale Aquatic & Diving Center, which is also home to the International Swimming Hall of Fame. Looking forward, we expect continued strong demand in the second quarter for South Florida. Our AC and Element hotels located across from Brickell City Center are ideally situated for visitors attending the World Cup Fan Festival at Bayfront Park in downtown Miami during June and July.

In Fort Lauderdale, the Oceanside is pacing 12% ahead of second quarter 2025 as the property continues to ramp post-renovation. Non-rooms revenue increased 10% year-over-year in the first quarter across the company's portfolio, reflecting continued progress in our efforts to capture a greater share of the customer's discretionary spend. Food and beverage revenue was again a meaningful contributor, supported by the reconcepted restaurant and bar offerings at the Oceanside Fort Lauderdale Beach, enhanced breakfast programming at select hotels, and continued focus on driving higher beverage and outlet sales. In particular, food and beverage revenues at the Oceanside Fort Lauderdale Beach experienced a four-fold increase year-over-year and drove the majority of the company's overall increase in food and beverage sales. We also realized healthy growth in other ancillary categories, including marketplace sales, parking income, and resort and amenity fees.

These revenue streams remain an important component of our broader operating strategy, and we believe there is additional opportunity to build on this momentum throughout 2026. Pro forma operating expenses increased 3.6% year-over-year in the first quarter, reflecting continued discipline across the portfolio despite ongoing cost pressures. Increases in the quarter were primarily driven by merit-based wage adjustments as well as payroll taxes and employee benefits, which is a result of our strategic shift to internal staffing. Stability in the labor pool is best evidenced by the continued reduction in contract labor, for which nominal costs declined 6% versus first quarter 2025. Contract labor now represents 9% of our total labor pool, which is approaching pre-pandemic levels. Furthermore, employee turnover is also in line with pre-pandemic levels, declining 1,300 basis points from the prior year period.

For the full year 2026, we expect nominal expense growth of approximately 3%. From a capital expenditure perspective, in the first quarter, we invested $12 million across our portfolio on a consolidated basis and $9 million on a pro rata basis. Ongoing and recently completed renovations include the SpringHill Suites Dallas Downtown, TownePlace Suites Grapevine, the Scottsdale and Co-Courtyard, the Homewood Suites Tucson, and our Mesa Hyatt Place. For the full year 2026, the company expects pro rata capital expenditures to range from $55 million-$65 million, the majority of which will be incurred in the second half of the year.

Turning to the balance sheet, during the first quarter, we fully repaid our $288 million, 1.5% convertible senior notes that matured in mid-February, utilizing our $275 million delayed draw term loan and corporate revolver. Pro forma for this refinancing, we have no debt maturities until 2028. When accounting for our swap portfolio, approximately 50% of our pro rata share of debt is fixed. Including the company Series E, Series F, and Series Z preferred equity within our capital structure, we are over 60% fixed on a pro rata basis. With ample liquidity and an average length to maturity of nearly 3.5 years, we believe the company is well-positioned to navigate any potential near-term volatility while also pursuing value creation opportunities.

On April 23rd, 2026, our board of directors declared a quarterly common dividend of $0.08 per share, representing a dividend yield of approximately 6.4% based on the annualized dividend of $0.32 per share. The current dividend continues to represent a modest payout ratio relative to our trailing 12-month AFFO. The company continues to prioritize striking an appropriate balance between returning capital to shareholders, investing in our portfolio, reducing corporate leverage, and maintaining liquidity for future growth opportunities. Included in our earnings release last evening, we updated full year guidance for key 2026 operating metrics as well as certain non-operational assumptions. Our outlook is based on the 94 lodging assets owned as of March 31st, 2026, including the Courtyard and Residence Inn, Dallas, Arlington South, which are currently under contract for sale and expected to close in the third quarter.

Our current range includes $500,000 of hotel EBITDA for the remainder of the year that would be foregone upon closing of this sale. For the full year, we have increased our RevPAR growth outlook to 0.5%-3%, which translates to Adjusted EBITDA of $170 million-$181 million and Adjusted FFO of $0.75-$0.85 per share. Based on our RevPAR growth outlook of 0.5%-3% and nominal expense growth of approximately 3%, we expect full year 2026 hotel EBITDA margins to range from flat to down 75 basis points, which includes approximately 25 basis points of headwinds from higher property taxes.

We expect pro rata interest expense, excluding the amortization of deferred financing costs, to be $58 million-$62 million, and preferred distributions, including the Series A, Series F, and Series Z securities, to be $18.5 million. Our outlook does not assume any additional acquisitions, dispositions, share repurchases, or capital markets activity for the balance of the year. The GIC joint venture results in net fee income payable to Summit, covering approximately 15% of annual pro rata cash corporate G&A expense, excluding any promote distributions Summit may earn during the year. With that, we will now open the call to your questions.

Thank you. As a reminder to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. The first question comes from Austin Wurschmidt with KeyBanc Capital Markets. Your line is now open.

Great. Thank you. Jon, you had mentioned May is pacing up, I think, 4%. I guess just based on what you've seen in March and April, like, how much degradation have you seen in pace this far out and then as you get closer to realization? Can you compare that to what you saw last year where, you know, if I recall, you kind of saw things maybe, you know, you lose a little bit of pace, I guess, as you, as you got closer, you know, through the month, you know, what you actually realized? Thanks.

Yeah. Hey, good morning, Austin. First, just to clarify, what we said in the prepared remarks was our second quarter pace is trending up about 4%. We expect April to finish up, you know, around 3.5%. When I look at kind of the monthly cadence for the second quarter, you know, May is a lower pace than we are experiencing in both April and then obviously June pace is way up given our expectations for the World Cup. I think what we've seen over the last 30-60 days has really been an acceleration in the month for the month. As you alluded to, that is a little bit of a reversal from the trends that we saw last year.

I would expect our June pace, which is trending up, high teens at this point year-over-year, to normalize as we get into that month. A lot of that's being driven by that we're not in kind of the traditional booking window that we would normally see for June, but we do have a fair amount on the books for the month of June, specifically related to World Cup. We would expect that to normalize. I think the broader takeaway and the more important takeaway here, Austin, is that what we've seen kind of in the month for the month and even within the last couple of weeks of the month has been a pretty meaningful acceleration from our expectations. You certainly saw that in the month of March.

You know, most of our Q1 outperformance was related to the month of March. We've seen those trends continue through April.

Yeah. That's helpful. I guess then as you think about then that pacing and, you know, what could be realized this second quarter, certainly tracking above the high end of the full year guidance range, like how do we think about cadence and that implied deceleration in the back half of the year? Again, going back to then what you've seen sort of affirming up in that midweek, you know, higher rated business segment, how does that compare to what you underwrote, then looking out into the back half of the year? Thanks.

Sure. Yeah, well, you know, clearly we've outperformed our expectations for the first quarter. I will say, you know, we did finish the quarter, you know, modestly positive, closer to flat. Our expectation was always that the second and third quarters of the year would be the highest growth rates of the year, that outlook really hasn't changed. I think we remain constructive on the second and third quarter. Some of that is being driven by the strength we see in World Cup markets. Our outlook is definitely more constructive today for the balance of the year than it was when we reported 60 days ago.

Thanks for the time.

Thank you. The next question will come from Michael Bellisario with Baird. Your line is open.

Hi, everyone. Good morning.

Hi, Mike.

Just morning. Two parts here. Just in terms of the pickup in demand that you've seen, just one, how would you separate BT versus leisure trends? Two, any quantifiable share gains that you might have seen from rebookings from Mexico during the peak spring break travel period? Thanks.

Sure. Yeah, I think again, probably the biggest takeaway from the quarter has been strength was fairly broad-based. What you saw was, you know, really rate-driven RevPAR growth in the quarter and more specifically in March. That's a reflection of the fact that we were able to either yield out lower rated business or really drive incremental occupancy in our higher rated channels. Those channels were predominantly our premium rated retail channels and our negotiated channels. We definitely saw, you know, our best growth rates midweek in the negotiated segment. Our first quarter RevPAR in the negotiated segment was up 8%. It was up double that in the month of March. Our urban markets were up 6% in the month of March.

There's no question that, we saw, you know, really strong midweek BT-driven demand throughout the quarter, and again, particularly in the month of March. Leisure was also good. I think when you look at our markets in South Florida and Scottsdale, we outperformed our expectations going into the quarter. There's, there's likely some benefit from the disruption that we saw in Mexico in the month of March. Again, I would just go back and emphasize the fact that most of our growth, more of our growth, I should say, is coming midweek and in urban markets and, in kind of business transient related demand. It was beneficial, but not something that I think is gonna create some sort of one-time, one-month distortion in our demand patterns.

Then on Mexico?

Yeah. Sorry, specifically on Mexico. I think that it was a benefit predominantly in our South Florida and Scottsdale markets. It definitely helped us in March, but as I said in the prepared remarks, a lot of the trends that we saw in March have continued into April, and I don't expect that to create any type of difficult comparison or distortion in demand patterns going forward.

Got it. Just one follow-up. 1Q, more rate than OC. Obviously, there are some impacts affecting demand in 1Q. How should we think about 2Q and beyond in terms of the mix between rate growth and occupancy growth going forward? That's all for me. Thanks, guys.

Yeah. Thanks, Mike. I think that the expectation is that the vast majority of our RevPAR growth going forward will be rate driven. Again, the trends that we saw in the 1st quarter really have continued through April, and our expectation is that the majority, if not all of our, of our RevPAR growth in April, will be rate driven. I think when we gave our initial guidance, we expected kind of a 60/40 rate versus occupancy split. That thankfully has shifted to be again, predominantly rate driven growth for the remainder of the year, which should have a better flow through to the bottom line.

Got it. That's helpful. Thank you.

Thanks, Mike.

Thank you and as a reminder to ask a question please press star one one on your telephone. The next question will come from Chris Woronka with Deutsche Bank. Your line is open.

Hey, guys, good morning. Thanks for taking the question. It's a topic we used to talk about a lot. I don't know that we do every quarter now, and I apologize if I missed prepared comments, but, can you talk a little bit about direct bookings and kind of where those stand for your portfolio and also kind of along those lines, you know, do you think all these new and expanded branded credit cards are helping, you know, drive direct bookings to you on the leisure side? I have a follow-up. Thanks.

Yeah, sure, Chris. you know, we have continued to grow our share of direct bookings. you know, we're probably ±70% for the full portfolio. I think that's a reflection of the fact that we do have a lot of high-quality hotels and good locations that are affiliated with really strong brand distribution channels. We did see that step up to some extent, particularly our brand.com channels in the first quarter. That's been, you know, really a continuation of a lot of the trends that we've seen really coming out of the pandemic. Last year, maybe being a mild exception to that when there was a little bit greater reliance on some of the OTA channels. Again, as you alluded to, those are, you know, very powerful distribution platforms.

They're powerful loyalty programs, and we're driving the majority of our business, through those channels.

Okay. Very helpful. Then kind of along those same lines, I know, I know you don't have many resorts and, particularly with Hyatt, but, I think Hyatt just recently went through another, I don't know if I'm supposed to call it points devaluation or just adjustments, new kind of award chart tiering. Is that having any impact on you? Again, I know you don't probably get a ton of redemptions, but I think that was meant to be a little bit more owner-friendly. I guess along those same lines, the Hyatt breakfast that's, you know, been, I know, gone through a lot of different iterations in terms of trying to get that, get that right. Any, any update on whether you're getting any minor, you know, bottom line help from those changes?

Thanks.

Yeah. I would say to your point, we don't have a ton of Hyatt properties that are kinda high redemption properties generally. Maybe Orlando being the exception to that, where we do get a fair amount of redemptions there. Orlando has been, you know, a terrifically strong market, particularly where we are in Orlando near the new Universal development. I would say generally speaking, kind of the brand redemption programs have been trending in a more kind of owner-friendly way over the last several quarters, and we hope that that continues. Specifically related to breakfast, as you did allude, we were part of some of the pilots on the charge to breakfast at Hyatt Place. I would say that the overall, it was a very positive experience for us.

That it's more of a property by property or market-specific commentary. I'd say generally it's been a positive to the bottom line. Modestly positive to the bottom line.

Okay. Understood. Very good. Thanks, guys.

Thanks, Chris.

Thank you. The next question will come from Logan Epstein with Wolfe Research. Your line is open.

Yeah, thanks for taking the question. Maybe just diving into the government segment. You guys noted the sequential improvement into March in inflecting positive. Can you just dive deeper on, like, was that driven by any specific markets or was it broad-based across the portfolio? Then I guess a follow-up to that is maybe trying to quantify the potential impact, given you guys noted it was down 20% for a number of quarters in 2025. Can you just talk about what's the embedded expectation for the rest of the year?

Yeah, sure. You know, I think you called this out. We've talked for a while about how our comps were gonna ease as we got into the March, April timeframe, and we started to lap the DOGE comparisons from the first quarter of last year. Obviously, that played out in the first quarter. You know, government revenue for us was down about 12% year-over-year. It had been then been trending down 20-25% for most of last year, with maybe the exception of October, when we saw, you know, some incremental reductions in demand related to the government shutdown. That was really driven in the first quarter. We actually saw March, government-related revenue go up 3%.

As I said in the prepared remarks, our outlook, our pace for the second quarter, specifically related to government, you have to remember, we don't have a lot on the books. It is still a relatively small demand segment, so these tend to be smaller numbers. We are trending up kinda mid-single digits year-over-year. I think our expectation going into the year was for once we got into the second quarter, for government demand to be fairly flat year-over-year. This is kinda modestly more positive than maybe we would have expected coming into the year. And in terms of markets, you know, we've seen some lift in markets like Tucson. We had a really strong quarter in Washington, D.C. Some of that was kinda government-related and government adjacent business.

It's been fairly broad-based. Again, I think our expectations are, you know, modestly more constructive than they were when we started the year, as evidenced by our second quarter pace.

Got it. Maybe a follow-up on a different note, just one we haven't talked about in a few quarters. Given we've seen now, I guess, three quarters of operations at the Onera expansion, can you just talk about how that's performing with the new keys there relative to initial underwriting?

Yeah. We've done really well there. We, you know, we had a nice beat to our internal budgets and expectations in the first quarter. It's, you know, a wonderful, a wonderful asset. I think it really feeds off a lot of the growth that's happened in Austin. There's been just tremendous growth in Fredericksburg. You know, they announced, you know, some high-end product that's gonna come out in that general area. There's a Waldorf Astoria that's gonna get built. There's an Aman that was recently announced out there. The growth in the sub-market of Fredericksburg has been terrific, which has certainly helped our performance. You know, we have a really unique, I think, very compelling offering.

The thesis that, you know, really got us to invest in that project initially and then the thesis around the expansion has all played out. Again, we were happy with the first quarter results, which were above our expectations fairly meaningfully.

Thanks for the time.

Thanks, Logan.

Thank you. I'm showing no further questions at this time. I will now turn the call back over to Jon for closing remarks.

Great. Well, thank you all for joining us today. We look forward to seeing many of you on the conference circuit here over the next several weeks. Thank you again, and hope you all have a nice weekend.

This concludes today's conference call. Thank you for participating, and you may now disconnect.

Good day, and thank you for standing by. Welcome to the Summit Hotel Properties, Inc. Fourth Quarter 2025 Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Kevin Milota. Please go ahead, sir.

Thank you, operator, and good morning. I'm joined today by Summit Hotel Properties' President and Chief Executive Officer, Jon Stanner; and Executive Vice President and Chief Financial Officer, Trey Conkling. 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 SEC filings. Forward-looking statements that we make today are effective only as of today, February 26, 2026, 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 President and Chief Executive Officer, Jon Stanner.

Thank you, Kevin, and good morning, everyone. Thank you for joining us today for our fourth quarter and full year 2025 earnings conference call. As I reflect on last year, I'm pleased with how we executed in what was a complex and challenging operating environment. Coming out of the first quarter, we understood the year would be defined by uncertainty surrounding macroeconomic conditions, demand visibility and certain policy-related headwinds and I'm proud of how our teams responded. Throughout the year, we remained disciplined and focused on the aspects of the business we can control, growing market share, managing expenses, strengthening the balance sheet, allocating capital prudently and investing in our portfolio to best position Summit for long-term shareholder value creation. On today's call, we will provide details on our fourth quarter and full year 2025 results, offer our perspective on the current lodging environment and our outlook for 2026, and highlight our recent capital recycling and balance sheet activities. In the fourth quarter, we experienced an encouraging positive inflection in demand compared to the second and third quarter of 2025, as RevPAR trends improved sequentially by over 200 basis points, resulting in a fourth quarter same-store RevPAR decline of 1.6%. Demand patterns generally stabilized throughout the quarter despite the incremental pressure created by the October government shutdown. In particular, midweek results reflect stable underlying group demand and growing corporate travel, which allowed us to increase rates in each of these segments for both the fourth quarter and full year. Government and international inbound demand, which combined represent approximately 10% to 15% of total room nights across our portfolio, continued to create meaningful headwinds in the quarter, declining approximately 20% on a blended basis. Excluding these 2 segments, our fourth quarter RevPAR grew by approximately 60 basis points year-over-year, reflecting the overall relative strength of other segments. These are encouraging trends as we move into 2026, particularly with easier government demand comparisons on the horizon. Our teams continue to do a terrific job growing market share with our fourth quarter RevPAR index improving by 220 basis points to an index of 117, reflecting the high-quality nature and locational strength of our portfolio, complemented by our expertise in revenue management. We are approaching and in many markets surpassing all-time post-pandemic market share highs across our portfolio. For the full year, same-store RevPAR declined 1.8%, driven predominantly by lower average daily rates as demand shifted towards lower-rated segments starting late in the first quarter when the significant reduction in government demand first began to materialize. While weakness in government demand and international inbound travel has been well documented. It is important to emphasize that demand patterns in other segments have been stable. And we are expecting year-over-year results to improve as comparisons ease starting in the second quarter. From a capital allocation perspective, we continue to execute on our disciplined capital recycling strategy during the fourth quarter, closing on the sale of 2 noncore hotels, the 107-room Courtyard Amarillo Downtown, which was owned in our joint venture with GIC and the wholly owned 123-room Courtyard Kansas City Country Club Plaza. These dispositions generated aggregate gross proceeds of $39 million, reflecting a blended yield of 4.3% based on trailing 12-month net operating income after consideration of approximately $10 million of foregone near-term capital expenditures. In addition, last week, we closed on the sale of the 122-room Hilton Garden Inn in Longview, Texas, another noncore asset owned in our GIC joint venture. The $12.3 million sale price represented a 6.7% capitalization rate based on the estimated trailing 12-month net operating income after consideration of approximately $2.6 million of foregone near-term capital expenditures. These 3 assets had a blended RevPAR of $89, a nearly 30% discount to the current pro forma portfolio. Since 2023, we have sold 13 noncore hotels, generating approximately $200 million of gross proceeds and eliminating nearly $60 million of anticipated capital expenditures at an approximate 4.6% net operating income capitalization rate. These sales reflect our disciplined approach to monetizing lower growth, capital-intensive assets and redeploying proceeds to enhance liquidity, reduce leverage, and support higher return uses across the portfolio. As we turn to 2026, we believe the fundamental setup for our industry is improving and several company-specific tailwinds position Summit for a positive year. We expect demand trends broadly to continue to improve and year-over-year comparisons to ease as we move through the year. Historically low levels of new supply support incremental demand growth, translating into both occupancy and rate gains in 2026 and for the foreseeable future. While we remain mindful of near-term volatility, we believe these trends create a more constructive backdrop for top line growth in 2026. With that context, we're introducing our initial outlook for the year. Trey will walk through the details of our ranges later in the call. But broadly speaking, our guidance reflects modest top line growth supported by improving fundamentals, disciplined expense management and the cumulative benefits of our capital reinvestment and recycling efforts, which have enhanced our portfolio and strengthened the balance sheet. The company is poised to benefit from several special events in 2026, notably the FIFA World Cup. We have exposure to 6 World Cup host markets, which together account for nearly 60% of the matches played domestically, providing a unique demand tailwind in June and July. In addition, convention and special events calendars are favorable in several of our key markets. And we expect continued normalization of government-related demand and international inbound travel as year-over-year comparisons begin to ease in the second quarter. We expect full year 2026 RevPAR to range from flat to up 3%, driven predominantly by gains in average daily rates. While our outlook for the full year is constructive, we expect the first quarter to be the most difficult of the year with RevPAR trending in line with our fourth quarter 2025 results. January RevPAR declined approximately 3% despite a strong start to the month as Winter Storm Fern created significant disruption across our portfolio. We also faced 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 6 hotels. February represents our most difficult comparison of the quarter as portfolio RevPAR increased over 7% last year. Finally, the majority of our first quarter of last year was insulated from the significant reduction in government demand we experienced for the remainder of the year. Despite these challenges, our outlook is trending positive as March pace is down less than 1% year-over-year and April pace is up year-over-year, reflecting the ongoing gradual improvement in demand patterns we see across the portfolio. It is important to highlight these pace improvements come at a time of the year prior to lapping the sharp pullback in government demand we experienced last year over the same period, making these trends even more encouraging. In summary, we believe our industry is beginning 2026 with modest expectations, but with meaningful upside driven by the continued improvement in several of the demand patterns we are already experiencing in our business. Longer term, we are poised to benefit from an extended period of low supply growth and the ongoing societal prioritization of travel and experiences. Summit is uniquely positioned to benefit from these conditions given our high-quality portfolio, efficient cost structure, and strong balance sheet. Our priorities in 2026 remain clear: a continued relentless focus on optimizing hotel profitability, prudently allocating capital and strengthening our balance sheet, all of which will drive long-term shareholder value. With that, I will turn the call over to Trey, to walk through the financial results and balance sheet in more detail.

Thanks, Jon, and good morning, everyone. Fourth quarter 2025 RevPAR demonstrated sequential improvement of 240 basis points from the third quarter as operating fundamentals outside of government and inbound international demand remained resilient in the face of broad macroeconomic uncertainty. Fourth quarter pro forma RevPAR declined 1.8%, driven by occupancy and average daily rate declining by 0.7% and 1.1%, respectively. This outperformed our RevPAR expectations for the quarter of down 2% to 2.5%, as we experienced stability in group and strengthening business transient fundamentals as well as a mix shift to higher-rated demand segments. Several core markets demonstrated strength in the fourth quarter, including San Francisco, Orlando, South Florida and Nashville. San Francisco is benefiting from improved perception as the market experienced strength from citywide conventions, event-driven leisure demand and improving business travel, which drove outsized RevPAR growth of over 40% year-over-year during the quarter. Two citywide events, including Dreamforce, which shifted into the fourth quarter and Microsoft Ignite were key contributors to our hotel performance in Fisherman's Wharf and Oyster Point. In addition, continued strength in corporate demand, particularly in the Silicon Valley submarket, resulted in another strong quarter for our Hilton Garden Inn Milpitas. Looking ahead, we expect continued growth for San Francisco in 2026, driven by citywide events, increasing business transient demand and broader Bay Area activity surrounding Super Bowl 60 and the World Cup. In Orlando, all 3 of the company's assets are benefiting from the recently opened Epic Universe Park, driving growth in both the leisure and group segments. RevPAR for our Orlando properties increased 9% in the fourth quarter as strong demand enabled our hotels to shift away from advanced purchase rates and back toward higher-rated retail channels, driving meaningful ADR improvement. In South Florida, where RevPAR grew 4% during the fourth quarter, our hotels are experiencing sustained momentum across leisure, corporate and special event demand, supported by a strong local economy and a continued wave of new business and investment activity in the region. Miami continues to benefit as a destination for corporate relocations, financial services and international business, translating into solid corporate transient and group demand. In particular, our newly renovated Oceanside Fort Lauderdale Beach is delivering very strong results with fourth quarter RevPAR, total revenue and gross operating profit increasing 9%, 39% and 53%, respectively, as the renovated rooms product and multiple Oceanfront food and beverage outlets are resonating with guests. We expect another strong year in 2026 from our South Florida properties, which are off to a great start in the first quarter, supported by the College Football National Championship held in January and incremental leisure demand, partially driven by the harsh winter conditions in the Northeast and Midwest. Looking ahead, our portfolio is well positioned to capitalize on World Cup-related activity in South Florida, alongside the continued ramp-up and stabilization at the Oceanside Fort Lauderdale Beach. In Nashville, fourth quarter performance was primarily driven by strong sports-related and group demand, complemented by our focused transient revenue strategies aimed at capturing high-value weekend leisure travelers. This deliberate mix shift allowed us to optimize rate on peak nights, drive incremental occupancy around key events and further strengthen our properties' position within a resilient and experience-driven market. Non-rooms revenue increased 9% and 5% for the fourth quarter and full year 2025, respectively, in our pro forma portfolio. Food and beverage revenue continues to benefit from the re-concepted restaurant and bar offerings at the aforementioned Oceanside Fort Lauderdale Beach. Our reprogrammed breakfast offering at certain hotels and other ongoing initiatives aimed at improving breakfast and beverage sales. Other non-rooms revenue growth was driven by strong increases in marketplace sales, parking income and resort and amenity fees. We are encouraged by the growth of these ancillary revenue streams and expect this trend to continue in 2026. Fourth quarter adjusted EBITDA was $39.7 million and adjusted FFO was $22.3 million or $0.18 per share as the company benefited from lower interest expense and a reduced share count resulting from our accretive share repurchases completed in the second quarter. For the full year 2025, same-store RevPAR declined 1.8%. Adjusted EBITDA was $174.8 million and adjusted FFO was $0.85 per share. The company's intense focus on expense management resulted in pro forma operating expenses increasing approximately 2% year-over-year. Throughout the year, our asset managers and third-party operators executed effectively on wage management initiatives, reduced reliance on contract labor and improved employee retention. For the year, contract labor declined nearly 9%. And contract labor currently represents less than 10% of total labor costs, which is approaching pre-pandemic levels. We also continue to experience improvement in employee retention, which is driving higher productivity, lower training costs and enhanced guest satisfaction. Turnover rates at year-end 2025 have declined approximately 24% from year-end 2024, highlighting the ongoing stabilization of the labor market. From a capital expenditure perspective, for the full year 2025, we invested approximately $75 million across our portfolio on a consolidated basis and $63 million on a pro rata basis. Ongoing and completed renovations during 2025 include the Oceanside Fort Lauderdale Beach, Courtyard Charlotte, Residence Inn Madrid, Scottsdale Oldtown Hyatt Place and the Atlanta Midtown Residence Inn. Over the past 3 years, we have invested more than $250 million in capital expenditures on a consolidated basis, reflecting our continued commitment to maintaining a best-in-class portfolio. Our 2026 pro rata capital expenditure guidance is $55 million to $65 million, which is consistent with our spend in 2025 and a level we believe is sustainable going forward. This represents a significant reduction relative to the elevated capital spend from 2022 through 2024 as the company addressed deferred capital investment related to the pandemic. Turning to the balance sheet. During 2025, we made significant progress in extending maturities, reducing borrowing costs and enhancing corporate liquidity. Subsequent to year-end, we fully drew our $275 million delayed draw term loan to retire the $288 million, 1.5% convertible senior notes that matured in mid-February. Pro forma for this refinancing, we have no debt maturities until 2028. Adjusting for swap activity in the third and fourth quarters as well as the retirement of the fixed rate convertible notes and the draw on the floating rate delayed draw term loan, approximately 50% of our pro rata share of debt is fixed. Including the company's Series E, Series F and Series D preferred equity within our capital structure, we were over 60% fixed on a pro rata basis. With ample liquidity, an average interest rate of 5.5% and an average length to maturity of nearly 4 years, we believe the company is well positioned to navigate any potential near-term volatility while pursuing value creation opportunities. On January 22, 2026, our Board of Directors declared a quarterly common dividend of $0.08 per share, representing a dividend yield of approximately 7.7% based on the annualized dividend of $0.32 per share. The current dividend continues to represent a modest payout ratio relative to our trailing 12-month AFFO. The company continues to prioritize striking an appropriate balance between returning capital to shareholders, investing in our portfolio, reducing corporate leverage and maintaining liquidity for future growth opportunities. Included in our press release last evening, we provided full year guidance for key 2026 operational metrics in addition to certain nonoperational items. For the full year, we anticipate RevPAR growth of 0% to 3%, which translates to an adjusted EBITDA range of $167 million to $181 million and an adjusted FFO range of $0.73 to $0.85 per share. It is worth noting that the company's 2 asset sales from the fourth quarter of 2025, the Courtyard Kansas City and the Courtyard Amarillo, as well as the recently announced sale of the Hilton Garden Inn Longview contributed approximately $1.6 million in adjusted EBITDA or $0.01 of AFFO per share in 2025. Based on the indicated RevPAR range of 0% to 3%, we expect margins to be flat to down 100 basis points, which incorporates approximately 25 basis points of headwinds from higher property taxes and implies operating expenses increasing between 2% and 3% year-over-year. We expect pro rata interest expense, excluding the amortization of deferred financing costs to be $57 million to $61 million, which includes an incremental $9 million from the recent refinancing of the 1.5% convertible notes with the delayed draw term loan. Preferred distributions, including the Series E, Series F and Series D securities are forecasted to be $18.5 million. This outlook does not include any additional acquisition, disposition or capital markets refinancing activity beyond what we have discussed today. Finally, the GIC joint venture results in net fee income payable to Summit covering approximately 15% of annual pro rata cash corporate G&A expense, excluding any promote distributions Summit may earn during the year. With that, we will open the call to your questions.

Our first question will come from the line of Austin Wurschmidt with KeyBanc Capital Markets.

Jon, you discussed the booking pace accelerating into March and April. Can you just dig into kind of the visibility that you have in length of the booking window that underlies your confidence in the trends in the months ahead?

Yes, sure. Thanks, Austin. Look, I think as we said, we've seen some very positive indications from a pacing perspective, really throughout most of the beginning of the year. But I'd say even more specifically over the last couple of weeks. That's translated into a pretty meaningful improvement in March. We're actually now pacing slightly positive for March. Our pace for April has turned almost up mid-single digits. I think what gives us the most optimism around that is, as we said, we still have not lapped the point where we started to see the effects of the pullback in government demand. So we're still kind of comping against periods where government demand was in place at this point last year. So we have seen -- again, I think a lot of this has been the continued solid performance midweek and particularly in urban markets. I do think we are seeing some near-term lift in Arizona and Florida markets from folks potentially relocating away from Mexico, given some of the security concerns there. So we do think that's going to give us a bit of a lift, particularly over the spring break period. But I would say more generally, the demand trends and the patterns that are giving confidence are fairly broad-based.

Then you mentioned that rate growth is really underlying the RevPAR growth outlook this year. Is that consistent with what you're seeing in terms of the pace figures in the months ahead? And just for the year, which segments really do you expect to be the biggest drivers of that improvement year-over-year?

Yes. Again, I'd say generally broad-based. But I do think we're -- today, what we're seeing is better performance and better lift midweek. And so I would expect the majority of that lift to come from the BT and group segments. But again, I do think we're encouraged with some of the signs we've seen on the leisure side as well. But I would say it's kind of a 2/3, 1/3 mix for us going into the year. And I think 2/3 will come from rate growth, which obviously has positive flow-through implications to the bottom line.

Then just last one from the World Cup perspective. I mean, how much lift do you have really that we'd call World Cup or event specific this year? You highlighted a number of events, but I assume World Cup is a big piece of that. Could you just kind of peel that off of the 0% to 3% RevPAR growth outlook?

Yes, sure. Look, I will say we're very constructive around World Cup. I do think the industry has tempered expectations to some extent around what that will actually drive. What we pointed out on the call and what I'd emphasize is a couple of things. One, we've got exposure to about 60% of the matches domestically and it touches about 1/3 of our total portfolio. And so we do have a significant amount of exposure to the World Cup. When we roll it up, again, we expect to see the vast majority of the benefit of those matches in the 6 markets where we host. 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. When we roll it all up for our outlook, we think it probably adds plus or minus 50 to 75 basis points to our full year expectations.

[Operator Instructions] Our next question will come from the line of Michael Bellisario with Baird.

Jon, on your 0% to 3% RevPAR guide, can you maybe help us go from sort of a broader industry outlook to stacking some of the market or asset-specific drivers that are boosting your forecast, maybe like Fort Lauderdale, assumed ramp-up in Asheville, any other markets or assets to call out that are lifting your outlook relative to the broader industry trends?

Sure. Look, I think at the midpoint of our range, we're probably not too far off of where most industry forecasts are for the year. I think you did highlight a couple of what I'll call Summit-specific tailwinds for this year. One is the lift we expect to get in Fort Lauderdale. And Trey commented on this in the prepared remarks. We are seeing tremendous lift since the renovation has completed. We do lap kind of the renovation comp for the first part of the year. So we'll obviously some significant year-over-year growth. But I think more importantly and more sustainably, we just think that, that asset is going to continue to perform incredibly well given the capital that's been invested there and the market that is strong. Asheville is another one that we have. We're still recovering from the storm a couple of years ago that we expect to have strong performance. We expect all of our World Cup markets to perform. I talked a little bit about that just a minute ago. But it is meaningful for us given the significant percentage of assets we have in those markets. And then obviously, there are markets like San Francisco, which we expect to continue to be very strong. Obviously, off to a great start to the year with not only the convention calendar, but the Super Bowl is also another World Cup market, which we think we will see some benefits from. I'd also highlight the South Florida market generally, even outside of Fort Lauderdale. The trends we've seen in Miami, particularly in Brickell, we're off to a tremendous start to the year there and expect that to continue to be a very strong market. And Tampa, once it laps the weather comps from the first quarter in Orlando are both doing very, very well. Orlando, again, is the beneficiary of the new park that's come in at Universal, which is driving incremental demand.

Then just to go back to the prior question on the booking window. I just want to dig a little deeper there. Any changes in discounting or advanced purchase rates? Are you still grouping up? Just anything beneath the surface that you're seeing or doing that gives you more confidence looking ahead? And that's helpful.

Yes. Sure, we talked a bit about this -- a lot about this in the second and third quarter. And I think when we looked at -- and we tried to emphasize this on the call. The pressure we saw on RevPAR, particularly in the second and third quarter of the year was so much driven by the pullback in government and international inbound demand. 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 OTA exposure, more advanced purchase exposure. We definitely tried to create a layer of group and advanced purchase demand. I think we are successful doing that. I think 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. So again, what we've tried to emphasize is that outside of those demand segments, the performance of other segments of our business has held up reasonably well. I wouldn't say we've seen any significant widening of the booking window at this point. I will say that, again, we feel like there is more and more incremental demand that's helping offset some of the falloff from the government segment in particular.

Our next question will come from the line of Chris Woronka with Deutsche Bank.

Apologies if you might have covered all or part of this earlier. But I was really trying to get a sense for -- as we look out kind of World Cup, 2Q, you have a little bit more visibility now maybe. I'm trying to get a sense for whether you think there's before and after? Is there a lull before and after? And so the markets where you have exposure, is it -- do you have enough visibility to see what happens before? I think the question is really, does any of the benefit you're likely to get offset at all by things that people not visiting immediately before or after the games?

Look, it's not something that has been particularly high on our list of concerns. I certainly understand that perspective. Look, we think kind of net-net, this is going to be a very positive event for the industry, certainly for our portfolio, given the exposures. I will say and kind of to that point, Chris, part of how we've approached the event, not dissimilar to how we typically approach Super Bowls is we like to create a layer of base demand on the books. We typically try to get some longer term stay business, whether it's media or takedown setup type of business particularly where we have guaranteed nights for extended lengths of time. And we think that helps derisk match-up scenarios that may not be as favorable. If there is some softness in the transient pickup, we derisk that to some extent because we've created this base layer of demand. We've taken a very similar approach. Our approach has been very tailored by market because our hotels have different locational strengths and weaknesses relative to where either the fanfests are located or the actual stadiums are located. So those strategies are customized by market. But by and large, I would say we approach this in a way where we try to strike the right balance between taking a base layer of group at still high rates. I think the rates on the books we have over the World Cup period are north of $300. So we still have very attractive rates on the books. But we do it in a way where, again, we derisk a little bit of the kind of in the period for the period risk around potential matchups. So that's been our approach consistent with how we've approached Super Bowls in the past.

Then as a follow-up, I don't know if there's been any discussion if we drill down a little bit deeper on Hyatt stuff. I know there's the points, big changes to points coming up not great as a customer, but hopefully helpful for you guys. And I know there's been discussions in the past about breakfast at Hyatt Place or Hyatt House. Any color you guys would add? Is that going to be -- is there any measurable benefit you see going from your Hyatt?

Yes. We did -- as you alluded to, we did beta test in a number of our assets, the pay-for breakfast concept at Hyatt Places. I would say, generally speaking, it was successful to the bottom line. I think Hyatt is still evaluating. And we're still working with Hyatt on the evaluation of how that gets rolled out more broadly. But it is something that we felt some benefits of in the second half of last year. I would say more broadly in terms of kind of points and loyalty in these programs. I think, again, the brands have been receptive to making sure that as those loyalty programs are growing, some of that benefit accrues to the hotel owners.

This will now conclude today's question-and-answer session. And I would like to hand the conference back over to Jon Stanner for closing remarks.

Well, thank you, everyone, for joining today for another earnings conference call. We do look forward to seeing many of you at some of the upcoming conferences we have, but we hope you have a wonderful day. Thank you.

This concludes today's conference call. Thank you for participating. And you may now disconnect.