ARA H-Trust’s Q1 net property income rises to $8.5 million as recovery continues
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ARA H-Trust expects the outlook for the US lodging market to remain optimistic, outweighing economic uncertainty and geopolitical risks.
PHOTO: ARA US HOSPITALITY TRUST
Chong Xin Wei
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SINGAPORE – ARA US Hospitality Trust (ARA H-Trust) posted a 19 per cent rise in net property income (NPI) to US$6.4 million (S$8.5 million) for its first quarter ended March 31, from US$5.3 million for the same period the year before.
Gross revenue was 10 per cent higher at US$36.2 million for the fiscal quarter, from US$32.8 million a year earlier.
The hospitality trust experienced continued recovery across its portfolio, its managers said on Thursday, noting that the pickup in hotel demand in the United States was supported by demand for business and group travel.
They also noted growing demand in “bleisure”, where guests extend travel days beyond weekdays to combine business and leisure travel.
Portfolio occupancy rose in the quarter to average around 61.7 per cent, up 7.1 percentage points year on year.
The trust’s revenue per available room (RevPAR) also increased, rising 24.4 per cent year on year to US$80, while its average daily rate was up 10 per cent year on year to US$130 in the quarter.
Meanwhile, its aggregate leverage ratio stood at 40.9 per cent as at March 31.
The trust – which owns hotel brands including Hyatt Place and Courtyard by Marriott – noted that it completed the acquisition of Home2 Suites by Hilton Colorado Springs South hotel in April this year, using net cash proceeds from prior divestment of non-core hotels.
The Home2 Suites hotel was acquired at a financial year 2022 NPI yield of about 9 per cent and will be immediately accretive to the portfolio, the managers said.
ARA H-Trust expects the outlook for the US lodging market to remain optimistic, outweighing economic uncertainty and geopolitical risks.
Although the projected RevPAR growth for the US hotel market will slow in 2023, it remains positive for the next three years, said the managers.
“With US hotel RevPAR now above pre-Covid-19 levels, the continued recovery of business and group travel represents further upside,” said Mr Lee Jin Yong, chief executive of the managers.
ARA H-Trust is a stapled group comprising ARA US Hospitality Property Trust, a real estate investment trust; and ARA US Hospitality Management Trust, a business trust. Stapled securities of ARA H-Trust closed 1.4 per cent lower at 35 US cents on Thursday. THE BUSINESS TIMES
