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Summit Hotel Properties Announces Acquisitions And Dispositions, Resolution Of Arbitration With Choice Hotels

Stocks in this article: INN

Resolution of the case allows the Company to bring closure to the dispute and focus directly on the development and growth of the eleven affected hotels as well as the other 62 hotels in its portfolio. “We are now in a much better position to execute our core strategy of owning the best brands in the best markets, as well as the positioning of select assets for the recycling of capital,” said Dan Hansen, the Company’s president and CEO. “With the re-branding process nearly complete for the 11 hotels, we are quite satisfied with the performance of the new brands and it solidifies our point that the change was not only necessary, but in the best interest of our shareholders. It certainly wasn’t the way we wanted to go about making these changes, but we believe the end result is an upgrade and improvement to our portfolio.”

Re-branded Property Operating Performance

Following the improper terminations, the 11 affected properties underwent re-branding. “We have been able to significantly improve the operating performance and create long term shareholder value, most notably in the underperforming former Cambria Suites branded properties,” said Hansen. “Through our relationships with Marriott, IHG and Hilton we have been able to make brand upgrades, converting some of these former Choice brands to better performing brands such as SpringHill Suites by Marriott, Fairfield Inn and Suites by Marriott, Holiday Inn, Holiday Inn Express and Doubletree by Hilton. In addition to the upgrade in brands we’ve also been successful in securing long term franchise agreements for these properties. The former Comfort Suites in Ft. Worth is not only undergoing a complete renovation and upgrade in brand quality to a Fairfield Inn & Suites by Marriott, it is also accompanied by a 20 year franchise term. This provides significantly greater accretive revenue opportunities as well as excellent long term value. Five of the former Comfort Inn brands have been converted to the AmericInn brand. We were able to eliminate substantial capital expenditure requirements on these properties while at the same time securing franchise agreements of ten years, which we believe will create additional value for these hotels over time.”

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