VANCOUVER—For the third quarter ended Sept. 30, American Hotel Income Properties REIT LP recorded RevPAR of $55.12, a year-over-year decrease of 28.1%, but a 67% increase from the second quarter of 2020.
“While AHIP’s third quarter was impacted by the ongoing pandemic, we were pleased to see continued occupancy and RevPAR improvement across our portfolio of 78 premium branded hotels—all of which have been open since mid-June,” said Jonathan Korol, CEO. “Our team’s operational emphasis on cost containment has yielded impressive results with higher Q3 NOI margins of 31.5% compared to 15.8% in Q2. We have also successfully negotiated loan relief for all of our loans, and remain focused on our balance sheet to further enhance our liquidity position.”
Korol continued: “While we expect the trend of sequential occupancy and RevPAR improvement to moderate as we enter the seasonally slower winter months, our strategically well-positioned suite-focused hotels, primarily in drive-to secondary markets, should continue to see higher demand, compared to hotels in more urban environments and hotels that are more reliant on group and corporate customers.”
Third-Quarter Highlights:
- Revenues for the quarter decreased 47.7% to $46.3 million (Q3 2019: $88.5 million) as a result of lower demand due to the significant impact of COVID-19 and portfolio changes between periods. On a sequential basis, revenue for the quarter increased 69.8% from Q2 2020. All of AHIP’s hotels segments experienced material revenue growth compared to Q2 2020, including AHIP’s extended-stay, select-service and Embassy Suites properties.
- ADR for the quarter decreased 3.7% compared to Q3 2019, to $96.53 (Q3 2019: $100.19) due to the impact of COVID-19 and portfolio changes between periods. On a sequential basis, ADR increased 1.5% from Q2 2020.
- Occupancy during the quarter decreased 19.4 percentage points to 57.1% (Q3 2019: 76.5%). Average occupancy in July was 55.3%. Average occupancy in August was 58.3%. Average occupancy in September was 57.7%. On a sequential basis, Q3 occupancy increased 22.4 percentage points compared to Q2 2020 occupancy of 34.7%. AHIP’s 24 extended-stay properties continued to see strong occupancy during the third quarter, recording 70.6% average occupancy.
- The STR RevPAR index, which compares the performance of AHIP-owned hotels to their competitive set in each region, indicated AHIP’s 78 premium branded hotels have, in aggregate, significantly outperformed their identified direct competition with an average index rating of 122.6 during the quarter (Q3 2019: 118.3)—with 100.0 representing a “fair share” of the market.
- Net Operating Income (NOI) decreased by 50.8% to $14.6 million (Q3 2019: $29.7 million) due to lower revenues, partially offset by expense reduction initiatives. On a sequential basis, NOI increased 239% from Q2 2020.
- NOI margins decreased to 31.5% (Q3 2019: 33.5%) as a result of lower revenue.
- Loss and comprehensive loss for the third quarter was ($12.1) million, compared to net income and comprehensive income of $2.1 million in Q3 2019.
