Sunstone Hotel Investors Reports $905.8M Revenue, 79.1% Drop in Net Income for Fiscal Year 2024

Sunstone Hotel Investors, Inc. reported a total revenue of $905.8 million for the fiscal year ending December 31, 2024, a decrease of 8.2% from $986.5 million in 2023. The decline in revenue was primarily attributed to the sale of the Boston Park Plaza, which resulted in a loss of $66.6 million in room revenue. Additionally, the company acquired the Hyatt Regency San Antonio Riverwalk, contributing $21.8 million in room revenue. The Comparable Portfolio, which excludes hotels undergoing significant renovations, saw a modest increase in room revenue of $6.7 million, driven by improved occupancy rates.

The company's net income for 2024 was $43.3 million, down 79.1% from $206.7 million in the previous year. This significant drop was influenced by the aforementioned hotel sale and a substantial decrease in gains from asset sales, which fell from $123.8 million in 2023 to just $0.5 million in 2024. The income attributable to common stockholders also decreased by 85.5%, from $192.7 million in 2023 to $28.0 million in 2024. Operating expenses decreased by 4.7% to $827.2 million, reflecting cost management efforts despite the challenges faced.

In terms of strategic developments, Sunstone completed the acquisition of the Hyatt Regency San Antonio Riverwalk in April 2024 for $230 million. The company also undertook significant renovations at The Confidante Miami Beach and the Renaissance Long Beach, which impacted occupancy and revenue during the year. As of December 31, 2024, Sunstone owned 15 hotels with a total of 7,253 rooms, an increase from 6,675 rooms in 2023, reflecting the addition of the new property.

Operationally, the company reported an occupancy rate of 72.1% for the Comparable Portfolio, an increase from 70.2% in 2023. Average daily room rates (ADR) decreased slightly to $327.83, while revenue per available room (RevPAR) increased by 1.0% to $236.37. The company maintained a strong liquidity position with $180.3 million in cash and access to a $500 million undrawn credit facility, which it believes will support its operational needs without requiring additional capital raises.

Looking ahead, Sunstone anticipates continued challenges from inflation and interest rate fluctuations, which may impact operating costs and financial performance. The company plans to focus on enhancing its portfolio through strategic acquisitions and renovations while managing its debt levels effectively. The board of directors will determine future dividend distributions based on long-term operating projections and capital requirements, with a commitment to maintaining its REIT status by distributing at least 90% of taxable income to shareholders.