American Hotel Income Properties REIT LP Provides Operational Update
October 13, 2020 at 18:13 PM EDT
VANCOUVER, BC, Oct. 13, 2020 /PRNewswire/ - American Hotel Income Properties REIT LP ("AHIP" or the "Company") (TSX: HOT.UN) (TSX: HOT.U) (HOT.DB.U) announced today that for the month of September 2020, occupancy across its portfolio of 78 Premium Branded hotels averaged 57.8%. This compares to 49.6% occupancy reported for September by STR Inc. for AHIP's direct competitive set, and occupancy of 34.7% reported by AHIP during the second quarter of 2020. As previously disclosed, the Company expects to generate positive cash flows when monthly occupancy is sustained above the 50% level. All 78 of AHIP's hotels are open and accepting guests. The Company's 24 extended stay hotels continue to be the best performing segment of AHIP's portfolio, averaging 69.9% occupancy in September.
AHIP is also pleased to confirm that Jonathan Korol joined the Company as Chief Executive Officer, on October 7, 2020.
"AHIP continues to be one of the best positioned U.S. hotel REITs within the current economic environment," said Jonathan Korol, CEO. "Our portfolio consists of 78 high-quality Premium Branded select-service properties located in secondary U.S. markets. Almost half of our room count consists of extended-stay hotels or others that offer suites with full kitchen amenities. These hotels continue to appeal to domestic travelers, demonstrated by the higher occupancy rates we've recorded across our hotels relative to many of our U.S. hotel REIT peers. I look forward to a sustained recovery of the Portfolio over the coming months and expect AHIP to be well positioned for growth opportunities within the sector as they become available."
In addition, AHIP is pleased to announce that loan relief has now been successfully completed for sixteen CMBS loans totaling approximately $522 million, including four additional relief agreements signed in the past month. These relief provisions allow for the use of restricted cash reserves to fund debt service along with waivers to fund FF&E reserves for periods of up to 90 days. These relief initiatives provide additional flexibility for AHIP as the Company continues to recover from the impact of COVID-19 on the hotel sector.
Certain statements in this news release may constitute "forward-looking information" or "financial outlook" within the meaning of applicable securities laws (also known as forward-looking statements). Forward-looking information and financial outlook involve known and unknown risks, uncertainties and other factors, and may cause actual results, performance or achievements or industry results to be materially different from any future results, performance or achievements or industry results expressed or implied by such forward-looking information and financial outlook. Forward-looking information and financial outlook generally can be identified by the use of terms and phrases such as "anticipate", "believe", "could", "estimate", "expect", "feel", "intend", "may", "plan", "predict", "project", "subject to", "will", "would", and similar terms and phrases, including references to assumptions. Some of the specific forward-looking information and financial outlook in this news release includes, but are not limited to, statements with respect to: AHIP's expectation to generate positive cash flows when monthly occupancy is sustained above the 50% level; the expectation by management that there will be a sustained recovery of AHIP's portfolio over the coming months and that AHIP will be well positioned for growth opportunities within the sector as they become available; and AHIP's stated long-term objectives.
Forward-looking information and financial outlook are based on a number of key expectations and assumptions made by AHIP, including, without limitation: current occupancy recovery trends at AHIP's hotels will continue and AHIP will achieve its current cash flow targets; AHIP's cost containment strategies will achieve their stated objectives; the COVID-19 pandemic will create opportunities for AHIP to grow its portfolio; there will be a sustained recovery of AHIP's portfolio over the coming months and there will be a meaningful and sustained economic recovery in the U.S. and within the U.S. hotel industry overall. Although the forward-looking information and financial outlook contained in this news release is based on what AHIP's management believes to be reasonable assumptions, AHIP cannot assure investors that actual results will be consistent with such information.
Forward-looking information and any financial outlook are provided for the purpose of presenting information about management's current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. Forward-looking information and financial outlook involve significant risks and uncertainties and should not be read as guarantees of future performance or results as actual results may differ materially from those expressed or implied in such forward-looking information and financial outlook. Those risks and uncertainties include, among other things, risks related to: AHIP's cost containment strategies may not achieve their stated objectives, and cash savings generated may be less than anticipated; current occupancy recovery trends at AHIP's hotels may not continue or may decelerate; AHIP may not achieve break-even or positive cash flow levels in accordance with the occupancy levels currently expected, or at all; there will not be a sustained recovery of AHIP's portfolio over the coming months and a meaningful and sustained economic recovery in the U.S. and within the U.S. hotel industry overall may be delayed or muted; AHIP may not be able to take advantage of opportunities, if any, from the pandemic to build on its portfolio; and AHIP may not achieve its stated long-term objectives. Management believes that the expectations reflected in forward-looking information and financial outlook contained herein are based upon reasonable assumptions and information currently available; however, management can give no assurance that actual results will be consistent with this forward-looking information and financial outlook. Additional information about risks and uncertainties is contained in AHIP's MD&A dated August 6, 2020 and annual information form for the year ended December 31, 2019, copies of which are available on SEDAR at www.sedar.com.
To the extent any forward-looking information or statements in this news release constitute a "financial outlook" within the meaning of applicable securities laws, such information is being provided to assist investors in better understanding the potential financial impact on AHIP of current occupancy recovery trends at AHIP's hotels and AHIP's cost containment strategies.
The forward-looking information and any financial outlook contained herein are expressly qualified in their entirety by this cautionary statement. Forward-looking information and financial outlook reflect management's current beliefs and are based on information currently available to AHIP. The forward-looking information and financial outlook are made as of the date of this news release and AHIP assumes no obligation to update or revise such information to reflect new events or circumstances, except as may be required by applicable law.
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