Sunstone Hotel Investors Shines in Q3 2026, Driven by Strong Industry Fundamentals and Disciplined Cost Controls
Sunstone Hotel Investors reported solid performance in the third quarter of 2026, driven by better-than-expected industry fundamentals and disciplined cost controls at the corporate level. The company's well-located portfolio benefited from broad-based strength across all segments, contributing to total portfolio RevPAR (Revenue Per Available Room) growth of 11.4%, excluding Andaz Miami Beach.
According to Chief Executive Officer Bryan Giglia, "The third quarter saw solid performance all around as better-than-expected industry fundamentals added to earnings growth generated from disciplined cost controls at the corporate level and from our meaningful share repurchase activity." The stronger-than-expected revenue performance allowed Sunstone Hotel Investors to deliver nearly 9% growth in Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) compared to last year.
The company's resorts led the portfolio with combined RevPAR growth of over 22%, including the benefit of Andaz Miami Beach. Wailea Beach Resort delivered another impressive performance as RevPAR grew nearly 27% in the quarter, and total RevPAR increased almost 31%. The resort has recovered its competitive position, growing occupancy by 19 points in the quarter and demonstrating the strength of the current appetite for leisure travel.
Sunstone Hotel Investors also reported strong demand at its wine country resorts, with third-quarter occupancy growing nearly 8 points and combined total RevPAR 11% higher. At Andaz Miami Beach, the company opened the resort's signature dining destination, Bazaar Meat by José Andrés, in late October, marking an exciting milestone as the full resort campus is now activated.
The company's urban hotel portfolio drove the greatest degree of outperformance relative to forecast, with combined total RevPAR growth of 12.8% in the quarter. The strength was broad-based, with each of Sunstone Hotel Investors' urban hotels generating at least 10% growth. While rate performance was solid at 5.5%, strong demand from group events and corporate travel also drove a healthy lift in room night volume.
Chief Financial Officer Aaron Reyes noted that the company repurchased an additional $130 million of common and preferred stock, bringing the year-to-date total to nearly $200 million of accretive buyback activity. This has not only helped to grow NAV (Net Asset Value), but also contributed to a nearly 18% increase in Adjusted FFO (Funds From Operations) per share this quarter.
The company's capital allocation strategy appears to be paying off, with the setup looking particularly good for the Marriott Boston Long Wharf and the JW Marriott New Orleans as these two very well-located hotels can drive significant premiums to the market. The performance at Sunstone Hotel Investors' convention hotels reflected a continuation of the same trends seen all year, with incremental transient demand partially offsetting a more subdued event calendar in a couple of its larger markets.
