On a more positive note, most hotel REITs have lots of liquidity to fund their operations until market conditions recover. Summit Hotel ended the second quarter with $270 million of liquidity between its cash and availability under its credit facility. With its cash burn rate narrowing to $7 million as of July, the REIT has an estimated 38 months of runway. It also doesn't have any debt maturities over the next three-and-a-half years.
Park Hotels & Resorts also has a lot of running room. It ended the second quarter with $1.6 billion of liquidity, including $1.3 billion of cash. At its current cash burn rate, it can operate well into 2023. Meanwhile, even in a worst-case scenario where it had to close all its hotels, it would only burn through about $65 million in cash (an improvement from its initial estimate of $85 million), suggesting it could weather a long-term storm.
Meanwhile, as market conditions improve, hotels will be able to start making money again. Summit Hotel Properties has a portfolio breakeven level of between $35 and $40 in RevPAR. The company was close to the low end of that range in June and exceeded the high end in July as occupancy improved. Host Hotels & Resorts is also starting to get back to breakeven at some of its properties, with 10 at or above that level by the end of June.
While hotel demand bounced back towards the end of the second quarter -- driven mainly by leisure travel -- much uncertainty remains due to the continued rise of COVID-19 cases across much of the country. That's keeping business travel at bay, which is a meaningful contributor to hotel stays. Meanwhile, leisure travel tends to cool off with the weather, suggesting that occupancy could level off in the coming months until there's widespread availability of either therapeutics or a vaccine to help suppress COVID-19.