Sunstone Hotel Investors reported a 9.3% year-over-year increase in portfolio revenue per available room (RevPAR) for the second quarter of 2026, exceeding market expectations. Adjusted EBITDAre grew 6% to $77 million, and adjusted funds from operations per diluted share rose 14% to $0.32.
Strong Resort and Urban Hotel Performance Boosts Earnings
The company’s resort portfolio drove growth, with nearly 27% combined RevPAR increase including Andaz Miami Beach. Wailea Beach Resort achieved close to 15% RevPAR growth in Q2 2026, a 10-point occupancy rise year to date, and an 18% increase in EBITDA over the previous year. Group room-night production at Wailea was up 36% year-to-date, with 2027 group
bookings ahead by over 10%. Wine Country resorts posted 5% RevPAR growth, supported by enhanced group business.
Andaz Miami Beach contributed $2.8 million in EBITDA on 72% occupancy and a $470 average daily rate. The property faced less occupancy compression from World Cup events than anticipated, but expects a stronger Q4 with the fall opening of its Bazaar Meat restaurant and temporary closure of a local competitor. Urban hotels recorded a 5.2% combined RevPAR increase, mainly driven by rate growth. JW Marriott New Orleans saw high group demand and strong ancillary spending, with group bookings for the second half up
double digits. Boston Marriott Long Wharf recorded strong demand across group, corporate, and leisure segments, aided by World Cup-related events.
Mixed Results in Convention-Focused Hotels
The San Francisco hotel delivered a 16% RevPAR increase in Q2 2026, benefiting from corporate transient demand despite June rate compression linked to World Cup activities. The Washington, D.C. property outperformed expectations as increased transient demand offset weaker group activity related to reduced government business. Conversion from Renaissance to Westin and renovations contributed to a 30% rise in future transient bookings.
Hilton San Diego Bayfront’s RevPAR declined 8.4% due to a reduced convention calendar and ongoing meeting-space renovations affecting group
demand. Transient business increased 19%, but failed to fully compensate for group revenue loss. The property booked a record $26 million in group revenue for Q2 and is expected to see sequential improvement, especially in Q4 2026.
Excluding Andaz Miami Beach, portfolio expenses grew 4.4% in total and 3.6% per occupied room, partly due to a higher transient mix at larger group hotels like San Diego. Outside San Diego, expenses per occupied room rose less and margins improved.
Hyatt Regency San Francisco Sale and Capital Deployment
Sunstone sold the Hyatt Regency San Francisco in late July 2026 at an implied multiple near 20 times trailing EBITDA. CEO Bryan
Giglia characterized it as a low-yielding asset and said the disposition allowed immediate growth value realization and reduced exposure to San Francisco’s cost pressures.
Part of the sale proceeds funded stock repurchases, with approximately $40 million of common stock bought at an average price of $9.24 per share and nearly $30 million of preferred stock repurchased at $20.44 per share, an 18% discount to liquidation value. Management stated these repurchases increase net asset value and earnings per share. Sunstone plans to remain opportunistic with buybacks while evaluating other uses for the sale funds.
2026 Financial Outlook and Investments
CFO Aaron Reyes projected 2026 RevPAR growth
of 7% to 9% across the company’s current 13-hotel portfolio, with total RevPAR expected between $404 and $411. Andaz Miami Beach alone is anticipated to contribute around 450 basis points to the midpoint of this growth range. Adjusted EBITDAre guidance for 2026 is $245 million to $255 million, and funds from operations per diluted share are forecast between $0.93 and $0.98.
Capital expenditures for the full year are estimated at $105 million to $115 million, reflecting higher-than-planned spending for repairs at Wailea Beach Resort following March 2026 storm damage. The company has received about $6 million in insurance reimbursements, including
$1.2 million for business interruption, with most additional costs expected to be covered.
President and CIO Robert Springer reported completion of meeting space renovations at the San Diego property, expecting this to boost bookings later in 2026 and into 2027. The Bazaar Meat restaurant at Andaz Miami Beach is finished and scheduled to open in the fall. Sunstone converted Oceans Edge Resort to Hilton Key West Resort & Marina on July 1, aiming to reduce customer acquisition costs and increase earnings.
CEO Bryan Giglia stated, “Our portfolio benefited from robust leisure demand as a result of increased summer travel and
special events, which added to sustained strength in group and corporate demand,” according to MarketBeat.
