Sunstone Hotel provides operational update

Sunstone Hotel provided an update on recent operating activity for Q3 and the estimated resulting impact on its previously provided full-year 2024 outlook. Operations for July and August 2024 were consistent with its prior expectations and reflect an acceleration in business travel and an anticipated market-wide moderation in leisure demand in Maui. During the first two months of the quarter, the company generated growth in total portfolio RevPAR and Total RevPAR, excluding The Confidante Miami Beach, of 2.4% and 6.3%, respectively, and Adjusted EBITDAre of approximately $37M, which was in-line with the FY24 outlook. Beginning in September, the company’s operations were impacted by labor activity at the 1,190-room Hilton San Diego Bayfront, which led to lower business volume at the Hotel. Hilton, the company’s manager of the Hotel, has reached an agreement and the Hotel has resumed normal operations. The company anticipates that full-year 2024 total portfolio RevPAR growth will be 125 to 150 basis points lower, Adjusted EBITDAre will be $11M-$13M lower and adjusted FFO will be approximately 6c lower than the 2024 outlook. Approximately $6M-$7M of the total estimated Adjusted EBITDAre impact relates to business that was disrupted in Q3, with the remainder related to business that has been cancelled for Q4. The company’s Renaissance Orlando at SeaWorld and Oceans Edge Resort & Marina in Key West remained open and operational during Hurricane Milton which impacted the state of Florida. Neither property incurred any meaningful physical damage from the storm. Since the beginning of Q3, the company repurchased 2.3 million shares of its common stock at an average purchase price of $9.79 per share for a total repurchase amount before expenses of $22.8M. The company currently has $428.3M remaining under its existing stock repurchase program authorization.