American Hotel Income Properties REIT (HOT-UN) Q2 2025 earnings summary

Executive summary

• Achieved all-time highs in average daily rate and RevPAR, with RevPAR index rising to nearly 115% in Q2 2025; RevPAR grew 2.9% year-over-year to $106, ADR up 2.2% to $140, and occupancy up 30 bps to 75.7%.

• Same-store total revenue declined 1.7% and RevPAR decreased 2.3% year-over-year, driven by lower government and group demand and tough comps from last year's event-driven demand; overall revenue declined 28.5% year-over-year due to asset sales.

• NOI margin fell 157 basis points to 33.8% due to operational disruptions and elevated expenses; same property NOI fell 5.4% and NOI margin dropped 150 bps to 32.9%.

• Diluted FFO per unit was $0.06, down from $0.10–$0.12 in Q2 2024, mainly due to lower NOI from asset sales and higher operating expenses.

• Significant progress made on strategic plan, including asset sales and debt refinancing to strengthen financial position.

Financial highlights

• Sold 16 hotels in 2024 for $165.2M and 11 hotels in H1 2025 for $73.4M; 2 more under contract for $25.2M; 8 sales in Q2 at a blended cap rate of 6.9%.

• Q2 2025 revenue: $51.1M (down from $71.5M in Q2 2024); Q2 2025 NOI: $17.4M (down 30.5% year-over-year); NOI margin: 34.1%.

• Debt-to-gross book value at 48.7%, down from 49.3% at year-end 2024; debt-to-EBITDA at 8.1x, up from 8.0x at year-end 2024.

• No secured debt maturities until late 2026; unrestricted cash at $18.6M and restricted cash at $25.4M as of June 30, 2025.

• Q2 2025 AFFO per unit diluted: $0.04 (down from $0.10 in Q2 2024); interest coverage ratio: 1.6x; weighted average interest rate: 6.43%.

Outlook and guidance

• Actively marketing 20 additional hotels across Hilton, Marriott, and IHG brands, with expected closings by year-end.

• Management expects same property RevPAR to improve year-over-year for the remainder of 2025, but margin pressure from elevated costs will persist.

• July 2025 ADR was flat year-over-year at $143, but occupancy rose 180 bps to 76.8%, driving RevPAR up to $110.

• Alternatives to address future obligations include further asset sales or recapitalization.

• No debt maturities until Q4 2026; Series C Preferred dividend rate increases to 14% in January 2026 if not redeemed.