Sunstone Hotel Investors Reports 5% Revenue Growth in Q2 2025, Net Income Declines 58.8%

Sunstone Hotel Investors, Inc. reported its financial results for the second quarter and first half of 2025, revealing a total revenue of $259.8 million for the quarter, a 5% increase from $247.5 million in the same period last year. For the first six months, revenue rose to $493.8 million, up 6.3% from $464.6 million in 2024. The company attributed this growth primarily to increased room and food and beverage revenues, which saw respective increases of 3.1% and 9.3% in the second quarter. However, net income for the quarter fell to $10.8 million, a 58.8% decrease from $26.1 million in the prior year, while net income for the first half dropped 59.1% to $16.0 million from $39.2 million.

The company experienced significant operational changes, including the sale of the Hilton New Orleans St. Charles for $47 million, which resulted in an $8.8 million loss. This sale, along with the acquisition of the Hyatt Regency San Antonio Riverwalk in April 2024, contributed to fluctuations in revenue and expenses. The company also reported that renovations at two hotels negatively impacted operations, although these properties are expected to enhance revenue in the long term. As of June 30, 2025, Sunstone owned 14 hotels, with a total asset value of approximately $3.0 billion.

Operationally, Sunstone's hotel occupancy rates improved, with the Comparable Portfolio seeing a 130 basis point increase in occupancy, although average daily rates (ADR) slightly decreased. The company reported a total of 190.2 million shares outstanding as of August 1, 2025, reflecting a reduction in shares due to a stock repurchase program that has seen the company buy back over 11 million shares in the first half of 2025. The total cash and cash equivalents stood at $73.6 million, with $71.2 million in restricted cash for future capital expenditures.

Looking ahead, Sunstone anticipates continued challenges from inflation and rising interest rates, which could impact operational costs and profitability. The company plans to maintain its focus on capital investments and hotel renovations while managing its debt levels, which totaled $872 million as of June 30, 2025. The company has drawn down $27 million from its credit facility and intends to utilize these funds for general corporate purposes. Sunstone remains committed to enhancing shareholder value through strategic acquisitions and operational improvements, despite the uncertain economic landscape.