Bear of the Day: Summit Hotel Properties (INN)

Summit Hotel Properties (INN) is a real estate investment trust (REIT) focused on premium-branded lodging facilities such as Hyatt Place.

INN’s bottom line has been trending in the wrong direction as it deals with a shifting business and broader travel landscape. Plus, Summit Hotel Properties and the broader hotel landscape have been shaken up by the likes of Airbnb, VRBO, and vacation rental companies.

Summit Hotel Properties is down over 50% in the past decade, including a 17% YTD drop as its bottom-line outlook continues to fade.

Investors Might Want to Stay Away from INN Stock  

Summit Hotel Properties is a hotel-focused REIT with a portfolio that includes 97 assets, 53 of which are wholly owned, across 25 states, as of February 24, 2025. In its own words, Summit Hotel Properties is focused “on owning premium-branded lodging facilities with efficient operating models primarily in the upscale segment of the lodging industry.”

INN’s portfolio of brands includes hotels under the Hilton, Hyatt, and Marriott umbrellas, as well as others. These hotels range from Embassy Suites and Residence Inn to Courtyard, Hyatt Place, and other well-known hotels.

The company’s revenue climbed substantially over the past 10 years. Unfortunately, its bottom line has faded. It is worth noting that instead of earnings, REITs report funds from operations or FFO, but investors can view them as essentially the same.

Summit Hotel Properties has seen its adjusted FFO outlook sink over the last few years, including another significant stretch of downward revisions since its Q2 earnings release in early August.

 Its Q3 consensus estimate is down 33% since its release, with its estimates for FY25 down 11% and FY26’s 19% worse. This backdrop lands INN stock a Zacks Rank #5 (Strong Sell).

Some investors will appreciate INN’s 5.9% dividend yield. But the stock has underperformed the market significantly, and the benchmark risk-free rate hovers at 4.17%. Therefore, investors might want to look elsewhere for now. 

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This article originally published on Zacks Investment Research (zacks.com).

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