American Hotel Income Properties REIT (HOT-UN) Q4 2024 earnings summary

Executive summary

• Portfolio of 49 hotels delivered up to 5.6% RevPAR growth to $98, with occupancy up to 72% and ADR up to $136, driven by gains across leisure, corporate, and group segments.

• Disposed of 16 properties for $165.2 million in 2024, three more for $41.2 million in early 2025, and eight under contract for $32.3 million, focusing on non-core, low EBITDA assets; proceeds used to reduce debt.

• Debt to gross book value improved to 45.9% (down 610 bps) and debt to EBITDA to 8.0x (down 2.5x) as of Dec 31, 2024.

• Completed $144.3 million in refinancings post-year-end, fully repaying the senior credit facility and pushing next loan maturity to Q4 2026.

• Ongoing legal dispute with hotel manager Aimbridge Hospitality, with litigation and counterclaims in progress.

Financial highlights

• Full-year revenue rose 5% to $211 million on a same-store basis, but total revenue was $256.9 million, down from $280.5 million in 2023.

• Normalized diluted FFO was $0.19 per unit for 2024, nil for Q4, down from $0.36 per unit in 2023.

• NOI margin for the year was as high as 30.6%, but overall NOI margin declined 110 bps to 28.6%; Q4 NOI margin at 26.3%-26.6%, down 30 bps year-over-year.

• EBITDA for 2024 was $59.5 million (margin 23.1%), down from $64.7 million in 2023.

• Non-cash impairment charges of $32.6 million recognized in 2024, mainly for hotels in Kentucky, Oklahoma, and Pennsylvania.

Outlook and guidance

• Continued focus on asset dispositions to further reduce debt and improve financial stability.

• No significant margin impact expected from potential U.S. tariffs in the short term due to fixed-price supply contracts; will reassess as contracts renew.

• No debt maturities expected until Q4 2026, assuming pending sales close as planned.

• Management expects operating expenses to remain a challenge in 2025 due to inflation and labor costs, but property insurance premiums are expected to decrease by $1.6 million annually.

• No observed impact from reduced inbound travel due to tariff policy volatility, as portfolio is domestically oriented.