American Hotel Income Properties REIT LP Reports 2024 Results With 5.6% RevPAR Growth, Property Dispositions and Debt Reduction

VANCOUVER, British Columbia, March 31, 2025 (GLOBE NEWSWIRE) -- American Hotel Income Properties REIT LP ("AHIP”, or the "Company”) (TSX: HOT.UN, TSX: HOT.U, TSX: HOT.DB.V), today announced its financial results for the three and twelve months ended December 31, 2024.

All amounts presented in this news release are in United States dollars ("U.S. dollars”) unless otherwise indicated.

2024 HIGHLIGHTS

• Diluted FFO per unit ⁽¹⁾ and normalized diluted FFO per unit ⁽¹⁾ were $0.21 and $0.19, respectively, for the year ended December 31, 2024, compared to $0.48 and $0.36 for the year ended December 31, 2023.
• ADR ⁽¹⁾ increased 2.3% to $134 for the year ended December 31, 2024, compared to $131 for the year ended December 31, 2023.
• Occupancy ⁽¹⁾ was 70.9% for the year ended December 31, 2024, an increase of 220 basis points ("bps”) compared to 68.7% for the year ended December 31, 2023.
• RevPAR ⁽¹⁾ increased 5.6% to $95 for the year ended December 31, 2024, compared to $90 for the year ended December 31, 2023.
• Completed dispositions of 16 hotel properties for total gross proceeds of $165.2 million for the year ended December 31, 2024, with a blended Cap Rate ⁽¹⁾ of 7.0% on 2023 annual hotel EBITDA ⁽¹⁾, after adjusting for an industry standard 4% FF&E reserve.
• Debt to gross book value ⁽¹⁾ was 45.9% as at December 31, 2024, a decrease of 610 bps compared to 52.0% as at December 31, 2023, and debt to EBITDA ⁽¹⁾ improved to 8.0x as at December 31, 2024, a decrease of 2.5x compared to 10.5x as at December 31, 2023.
• AHIP had $42.9 million in available liquidity as at December 31, 2024, compared to $27.8 million as at December 31, 2023. The available liquidity of $42.9 million was comprised of an unrestricted cash balance of $27.9 million and borrowing availability of $15.0 million under the revolving credit facility. As at March 28, 2025, AHIP had an unrestricted cash balance of approximately $13.1 million and a restricted cash balance of approximately $29.1 million.
• In 2025, several refinancings completed for total gross proceeds of $144.3 million which resulted in the full repayment of AHIP's senior credit facility comprised of the Credit Facility Revolver and Credit Facility Term Loan (defined below).
• AHIP has no debt maturities until the fourth quarter of 2026 assuming the hotel properties currently under contract for sale close as expected.
• AHIP intends to continue its strategy to sell hotel properties to enhance liquidity and reduce debt.

Q4 2024 HIGHLIGHTS

• Diluted FFO per unit and normalized diluted FFO per unit were nil for the fourth quarter of 2024, compared to $0.004 and $0.03 for the same period of 2023.
• ADR increased 3.2% to $130 for the fourth quarter of 2024, compared to $126 for the same period of 2023.
• Occupancy was 69.7% for the fourth quarter of 2024, an increase of 320 bps compared to 66.5% for the same period of 2023.
• RevPAR increased 8.3% to $91 for the fourth quarter of 2024, compared to $84 for the same period of 2023.
• Same property NOI ⁽¹⁾ was $13.3 million for the fourth quarter of 2024, an increase of 3.9% compared to $12.8 million for the same period of 2023.
• Same property NOI margin ⁽¹⁾ was 26.6% for the fourth quarter of 2024, a decrease of 30 bps compared to 26.9% for the same period of 2023.

"In 2024, AHIP made significant progress on our plan to reduce debt and high-grade the portfolio through asset sales and loan refinancings,” said Jonathan Korol, CEO. "AHIP completed the disposition of 16 hotel properties in 2024 for total gross proceeds of $165.2 million. These dispositions are expected to result in an improvement to overall portfolio asset quality with a pro forma increase in RevPAR, NOI margin and EBITDA per hotel.

As of the date of this news release, AHIP completed the dispositions of 3 hotel properties for total gross proceeds of $41.2 million in 2025, and AHIP has 8 hotel properties under purchase and sales agreements for estimated total gross proceeds of $32.3 million. AHIP also completed several refinancings in the first quarter for total gross proceeds of $144.3 million which resulted in the full repayment of AHIP's senior credit facility.

Dispositions completed and under contract in 2024 and 2025 have a combined Cap Rate ⁽¹⁾ of 7.0%, demonstrating value beyond AHIP's current trading levels on its remaining assets. As a result of our disposition and refinancing efforts, AHIP will have no debt maturing until the fourth quarter of 2026. We will continue to monitor macroeconomic conditions and operating performance, while considering further strategic opportunities to deliver value to unitholders over the long term.”

2024 REVIEW

FINANCIAL AND OPERATIONAL HIGHLIGHTS

For the year ended December 31, 2024, ADR increased 2.3% to $134, and occupancy increased by 220 bps to 70.9%. Overall, improved ADR and occupancy resulted in an increase of 5.6% in RevPAR to $95, compared to the year ended December 31, 2023. This result is attributable to higher demand for extended stay and select service properties, as well as the disposition of hotel properties with lower-than-average portfolio RevPAR.

NOI and normalized NOI ⁽¹⁾ were $73.4 million and $73.9 million for the year ended December 31, 2024, decreases of 11.9% and 15.0%, respectively, compared to NOI and normalized NOI of $83.4 million and $86.9 million for the year ended December 31, 2023. The decrease in NOI and normalized NOI was primarily due to the disposition of the 16 hotel properties completed in 2024.

NOI margin was 28.6% in the current year, a decrease of 110 bps compared to 29.7% for the prior year. The decrease in NOI margin was due to higher operating expenses as a result of general cost inflation, increased salaries and repair and maintenance expenses. Although certain operating expenses are expected to remain a challenge in 2025, the year-over-year NOI margin decline has improved to 110 bps in 2024 from 200 bps in 2023.

AHIP completed its property insurance renewal effective June 1, 2024, with a decrease in premiums compared to the prior period ended May 31, 2024. On an annualized basis, the decrease from the prior period is approximately $1.6 million, which will be recognized in earnings over a twelve-month period.

Diluted FFO per unit and normalized diluted FFO per unit for the year ended December 31, 2024, were $0.21 and $0.19, respectively, compared to diluted FFO per unit of $0.48 and normalized diluted FFO per unit of $0.36 for the year ended December 31, 2023. The decrease in diluted FFO per unit and normalized diluted FFO per unit was mainly due to lower NOI and higher financing costs, partially offset by lower corporate and administrative expenses in the current year.

SAME PROPERTY KPIs

The following table summarizes key performance indicators ("KPIs”) for the portfolio for the five most recent quarters with a comparison to the same period in the prior year on a same-property basis.

In the fourth quarter of 2024, same property ADR was $131, an increase of 0.8% compared to the same period in the prior year. Same property occupancy increased by 240 bps to 69.8% in the current quarter, compared to the same period of 2023. The increase in ADR and occupancy is primarily attributable to higher demand for extended stay and select service properties. Overall, the improved ADR and occupancy contributed to an increase of 5.7% in RevPAR.

Same property NOI increased 3.9% and same property NOI margin decreased by 30 bps in the current quarter, compared to the same period of 2023. The increase in same property NOI was mainly due to improved performance for hotels disrupted in 2023 by the weather-related damage in December 2022, and higher demand for extended stay and select service properties. The decrease in NOI margin was due to higher operating expenses as a result of general cost inflation, increased salaries and repair and maintenance expenses.

LEVERAGE AND LIQUIDITY

Debt to gross book value was 45.9% as at December 31, 2024, a decrease of 610 bps compared to 52.0% as at December 31, 2023. Debt to EBITDA as at December 31, 2024 was 8.0x, a decrease of 2.5x compared to December 31, 2023. The improvement in debt to gross book value and debt to EBITDA was due to the use of net proceeds from the completed dispositions to pay down CMBS mortgage debt as well as the term loans governed by the Sixth Amendment (defined below).

As at December 31, 2024, AHIP had $42.9 million in available liquidity, compared to $27.8 million as at December 31, 2023. The available liquidity as at December 31, 2024 of $42.9 million was comprised of an unrestricted cash balance of $27.9 million and borrowing availability of $15.0 million under the revolving credit facility. AHIP had an additional restricted cash balance of $24.7 million as at December 31, 2024. As at March 28, 2025, AHIP had an unrestricted cash balance of approximately $13.1 million and a restricted cash balance of approximately $29.1 million.

NON-CASH IMPAIRMENT CHARGES

For the three months ended December 31, 2024, the Company recognized non-cash impairment charges of $21.2 million related to 15 hotel properties, and impairment reversal charges of $1.6 million related to 3 hotel properties. For the twelve months ended December 31, 2024, the Company recognized non-cash impairment charges of $32.6 million related to 21 hotel properties, and impairment reversal charges of $1.6 million related to 3 hotel properties. The impaired hotels are primarily located in Kentucky, Oklahoma and Pennsylvania, and the hotels with impairment reversal charges are located in New Jersey, Texas and Maryland. AHIP completed the valuation process based on external appraisals, purchase and sales agreements, recent market transactions and internal valuations of hotel properties. The impairment charges and impairment charges reversal are primarily due to revised expectations on the timeframe for hotel properties to achieve stabilized income levels, higher operating costs, challenges with AHIP's hotel managers' ability to optimize cashflow, and local competition factors in select markets.

HOTEL DISPOSITIONS

2024 Hotel Dispositions Summary