American Hotel Income Properties REIT (HOT-UN) Q3 2024 earnings summary

Executive summary

• Portfolio of 58 hotels achieved 2.3% revenue growth and 2% RevPAR increase year-over-year in Q3 2024, driven by occupancy and ADR gains across leisure, corporate, and group segments.

• Strategic hotel dispositions and planned refinancings are underway to improve the balance sheet and address near-term debt maturities.

• Eleven hotel properties sold in 2024 for $112.4 million; five more under contract for $52.8 million, with proceeds used to repay debt.

• Operating environment remains challenging due to elevated costs, labor shortages, and high employee turnover, impacting margins.

• Liquidity improved to $36.5 million as of September 30, 2024, up from $27.8 million at year-end 2023.

Financial highlights

• Q3 2024 total revenue up 2.3% year-over-year; RevPAR at $98, up 2% from Q3 2023.

• Q3 2024 revenue was $65.7 million, down from $73.7 million in Q3 2023; nine-month revenue was $205.8 million, down from $214.7 million.

• NOI margin at 30.2%, about 50 basis points below 2020; margin pressure from labor and operating costs.

• Normalized diluted FFO was $0.07 per unit, down from $0.11 per unit in Q3 2023.

• Available liquidity at September 30, 2024, was $37 million, up from $28 million at year-end 2023.

Outlook and guidance

• October preliminary results show occupancy at 76%, ADR at $137, and RevPAR at $104, up 4% year-over-year.

• Dispositions and refinancing initiatives are expected to resolve all 2024 debt maturities and further strengthen liquidity.

• Management expects improved portfolio metrics (RevPAR, NOI margin, EBITDA per hotel) post-dispositions.

• Management remains optimistic about industry outlook heading into 2025, with continued focus on cost control and asset optimization.