ARA H-Trust Q1 net property income rises 19% to US$6.4 million as recovery continues
ARA US Hospitality Trust (ARA H-Trust) posted a 19 per cent rise in net property income (NPI) to US$6.4 million for its first quarter ended Mar 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, noting that the recovery in the US hotel demand was supported by continued demand for business and group travels, its managers said in a business update on Thursday (May 4).
They noted a growing “bleisure” demand, where guests combine business and leisure in travel days beyond weekdays.
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 24.4 per cent on year to US$80, while its average daily rate was up 10 per cent on year to US$130 in the quarter.
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Meanwhile, its aggregate leverage ratio stood at 40.9 per cent as at Mar 31.
The trust – which owns hotels including Hyatt Place and Courtyard by Marriott – noted that it has also 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 FY2022 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 US hotel market RevPar growth 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 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 flat at US$0.355 on Wednesday.
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