In This Article:
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Full Year EBITDA: $230 million.
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Full Year FFO per Share: $0.80 per diluted share.
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Net Purchase Price for Hyatt Regency San Antonio Riverwalk: $222 million.
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RevPAR Growth at Westin Washington DC: 30% driven by an 18% increase in group room nights.
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Group Room Nights Growth at Hyatt Regency San Antonio Riverwalk: Nearly 7% in the quarter.
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RevPAR Growth at New Orleans Hotels: Nearly 20% in the fourth quarter.
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RevPAR Growth at Marriott Long Beach Downtown: 45% compared to the fourth quarter of 2023.
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Capital Investment in 2024: $157 million.
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Net Debt and Preferred Equity to Trailing EBITDA: 4.3 times as of year-end.
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2025 RevPAR Growth Outlook: 7% to 10% compared to 2024.
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2025 Adjusted EBITDAre Guidance: $245 million to $270 million.
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2025 Adjusted FFO per Share Guidance: $0.86 to $0.98.
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Quarterly Common Dividend: $0.09 per share for the first quarter.
Release Date: February 21, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Sunstone Hotel Investors Inc (NYSE:SHO) achieved full year adjusted EBITDA and FFO per share at the high end of their guidance for 2024.
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The acquisition of the Hyatt Regency San Antonio Riverwalk at a 9% capitalization rate is expected to provide significant growth opportunities.
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The company successfully completed the conversion of the Marriott Long Beach Downtown, which is showing promising early performance.
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Sunstone Hotel Investors Inc (NYSE:SHO) returned nearly $100 million to shareholders in 2024 through dividends and share repurchases.
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The company maintains a strong liquidity position with nearly $700 million in total liquidity, providing flexibility for future investments.
Negative Points
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The Andaz Miami Beach project faced delays due to a challenging permitting process, impacting its expected contribution to earnings.
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Labor strikes in San Diego caused disruptions, affecting the company's performance in that region.
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Rising costs, including contractual wage rate increases, are expected to impact margins in 2025.
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The transaction market in 2024 was challenging, limiting opportunities for capital recycling and acquisitions.
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The company anticipates less interest income on cash balances in 2025 due to changes in deposit rates.
Q & A Highlights
Q: Can you discuss the underlying demand segment assumptions within the 7% to 10% RevPAR guidance, excluding the Andaz contribution? How are you thinking about leisure growth, group contribution, and business transient (BT) within that range? A: The RevPAR guidance is based on feedback from our hotels. Group demand is solid, pacing above 10% for the year. Business transient shows continued strength with slight improvements in certain markets. Leisure demand is expected to mirror last year, with potential upside in Maui and Orlando. The leisure segment presents the most potential risk or upside in the 2025 guidance.