American Hotel Income Properties REIT Q1 2026 Earnings Report

American Hotel Income Properties REIT EPS Results

• Actual EPS: -C$0.22
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

American Hotel Income Properties REIT Revenue Results

• Actual Revenue: $50.56 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

American Hotel Income Properties REIT Announcement Details

• Quarter: Q1 2026
• Date: 5/15/2026
• Time: After Market Closes
• Conference Call Date: Friday, May 15, 2026
• Conference Call Time: 12:00PM ET

American Hotel Income Properties REIT (TSE:HOT.UN) is a trust that invests in hotel real estate properties. The company's primary business is owning Premium Branded hotels, which have franchise agreements with international hotel brands including Marriott, Hilton, and IHG. It generates revenue from the room, food, beverage, and other revenue. The other revenue is comprised of conference room rentals, parking revenues, and other incidental income.

American Hotel Income Properties REIT Q1 2026 Earnings Call Transcript

Key Takeaways

• Neutral Sentiment: AHIP said it has launched a strategic review to maximize unit-holder value and has hired Robert W. Baird as its financial advisor while it evaluates a range of alternatives.
• Positive Sentiment: The company continued to advance its balance-sheet plan through asset sales and refinancing, including $161 million of property dispositions in 2025 and $67 million so far in 2026, with another $78 million of sales under contract expected to close in Q2.
• Positive Sentiment: Q1 operating performance showed resilience, with RevPAR up 1.4% to $98 and same-store revenue rising 2.2%, helped by stronger February and March trends and continued improvement in April.
• Negative Sentiment: Margins weakened materially as NOI margin fell 426 basis points to 24.1%, with management citing cost inflation in repairs, maintenance, utilities, and other expenses tied in part to extreme weather.
• Neutral Sentiment: AHIP reported negative normalized diluted FFO of $0.03 for the quarter, while cash and leverage shifted after the $25 million Series C share redemption, leaving unrestricted cash at $15.5 million and debt-to-EBITDA at 10.4x.

Presentation

[Operator]

Good morning, welcome to American Hotel Income Properties' first quarter results conference call. At this time all participant are in listen only mode [inaudible]. Before beginning the call, AHIP would like to remind listeners that the following discussions will include forward-looking information within the meaning of applicable Canadian securities laws, which forward-looking information is qualified by this statement. Comments are not a statement, including projections of future earnings, revenues, income, and FFO are considered forward-looking.

[Operator]

Participants on this call are encouraged to not place undue reliance on such information, which is provided based on management's expectations as of the date of this call. AHIP does not undertake any obligation to publicly update such information to reflect subsequent events or circumstances, except as required by law.

[Operator]

On this call, AHIP will discuss certain non-IFRS financial measures. For the definition of these non-IFRS financial measures, the most directly comparable IFRS financial measures, and a reconciliation between the two, please refer to their MD&A. References to prior year operating results are comparisons of AHIP's portfolio of 31 properties results in that period versus the same properties results today. All figures discussed on today's call are in U.S. dollars unless otherwise indicated.

[Operator]

Discussing AHIP's performance today are John O'Neill, Chief Executive Officer, Bruce Pittet, Chief Operating Officer, and Travis Beatty, Chief Financial Officer. I'll now turn the call over to John O'Neill, Chief Executive Officer.

[John O'Neill, CEO at American Hotel Income Properties REIT]

Thank you, operator. Thank you everyone for joining us today for our first quarter financial results conference call. On May 4th, 2026, AHIP announced that the company has initiated a review of strategic alternatives to maximize unit holder value. During the strategic review, the board will analyze and evaluate a range of alternatives. AHIP has retained Robert W. Baird & Co. as financial advisor to advise AHIP in connection with its strategic review.

[John O'Neill, CEO at American Hotel Income Properties REIT]

AHIP's board and management team continues to advance our plan to strengthen AHIP's financial position and preserve long-term value for our unit holders by addressing upcoming obligations with asset sales and loan refinancings. In 2025, AHIP completed the dispositions of 18 hotel properties for total gross proceeds of $161 million.

[John O'Neill, CEO at American Hotel Income Properties REIT]

The dispositions completed in 2025 have a blended cap rate of 7.6%, demonstrating value beyond AHIP's current unit price for its portfolio. So far in 2026, AHIP has sold three hotel properties for total gross proceeds of $67 million. AHIP currently has six additional hotel properties under purchase and sale agreements for estimated total gross proceeds of approximately $78 million at a blended cap rate of 5.9%, which are expected to close in Q2 of this year. AHIP also completed two loan refinancings in 2025 for total gross proceeds of $144 million.

[John O'Neill, CEO at American Hotel Income Properties REIT]

The net proceeds from these sales, along with a portion of the proceeds from the loan refinancings, were used to repay the CMBS loans secured by those properties, a portion of the portfolio loan, and to redeem $25 million of the outstanding Series C shares. We believe that our units are currently trading below their underlying value based on AHIP's assets. In December 2025, the TSX approved AHIP's notice of intention to make a normal course issuer bid.

[John O'Neill, CEO at American Hotel Income Properties REIT]

The notice provides that AHIP may, during the 12-month period commencing December 30th, 2025 and ending December 29th, 2026, purchase up to 6.8 million units, trading representing 10% of the public float. So far in 2026, AHIP has purchased approximately 300,000 units under the 2026 NCIB at an average purchase price per unit of CAD 0.48. I'll now turn the call over to Bruce to discuss first quarter hotel operations. Travis will then highlight key financial metrics. Bruce.

[Bruce Pittet, COO at American Hotel Income Properties REIT]

Thank you, John, and good morning, everyone. Looking at the first quarter, AHIP's portfolio of premium branded Select Service hotel properties continued to demonstrate strong demand metrics during what is traditionally the slowest demand quarter of the year, with RevPAR finishing at $98, which represents a 1.4% increase versus last year. Total revenue increased $770,000 for our portfolio of 30 assets.

[Bruce Pittet, COO at American Hotel Income Properties REIT]

In January, we experienced a slow ramp out of the holiday period, coupled with significant winter weather, resulting in a RevPAR decline of 5.9% for the month compared to prior year. Since that time, we have seen RevPAR grow in February and March, up 3.2% and 5.4% respectively, with RevPAR growth continuing in April.

[Bruce Pittet, COO at American Hotel Income Properties REIT]

Revenue from leisure-linked segments and negotiated segments grew year-over-year 1% and 3% respectively. Government revenue dropped 8% year-over-year. The group segment saw a slight decline of 1% year-over-year. In the quarter, the partial U.S. government shutdown, which started in February, caused disruption to the TSA, impacting air travel and hotel demand for a period of time throughout the United States during the quarter.

[Bruce Pittet, COO at American Hotel Income Properties REIT]

Q1 2026 occupancy was 68.7%, down 27 basis points compared to the same period in 2025. Year-over-year ADR growth was strong, up 1.8%, finishing at $142. For the quarter, the portfolio RevPAR index was 116.4, up 2.4%. We reference three distinct segments of our business: Extended Stay, Select Service and our Embassy Suites hotels.

[Bruce Pittet, COO at American Hotel Income Properties REIT]

During Q1 2026, Extended Stay had another strong quarter, with RevPAR finishing at $98, or up 2% versus Q1 2025. The Select Service segment achieved a RevPAR of $89. This represents a 6% decline versus Q1 2025 levels. The Embassy Suites segment was our strongest performing vertical in Q1, achieving a RevPAR of $111, up 13% year-over-year, driven by the performance of our Tempe, Arizona, and Covington, Kentucky properties.

[Bruce Pittet, COO at American Hotel Income Properties REIT]

Margins continue to face pressures, with costs outpacing revenues resulting in negative flow. NOI margin decreased by 426 basis points to 24.1% for the quarter compared to 2025. Cost escalations between rooms, non-labor, and undistributed expenses, particularly repairs and maintenance and utilities, driven by costs related to extreme weather events, had a material negative impact on Q1 results. Turning to AHIP's capital program.

[Bruce Pittet, COO at American Hotel Income Properties REIT]

Capital spend on PIPs and FF&E was $1.3 million and $1 million, respectively, for the first quarter. 80% of the capital was funded through restricted cash contributed by AHIP in prior periods for a net spend of $460,000 from AHIP's treasury. PIP spend was focused on the renovation of the Fairfield Inn & Suites, South Hill, Virginia, which was substantially complete at the end of the first quarter of 2026.

[Bruce Pittet, COO at American Hotel Income Properties REIT]

To prepare for the renovation of the Hampton Inn in Emporia, Virginia, planned for the second quarter of 2026. Preliminary April results for the AHIP 28 show occupancy at 77%, ADR at $141, and RevPAR at $108, or 3% above April 2025 RevPAR levels. With that update on our hotel operations, I'll now turn the call over to Travis to highlight key financial and capital metrics for the first quarter.

[Travis Beatty, CFO at American Hotel Income Properties REIT]

Thank you, Bruce. On April 17, 2026, AHIP and certain of its subsidiaries entered into a settlement agreement with ONE Lodging Management, a subsidiary of Aimbridge Hospitality, and certain of its subsidiaries to resolve the previously disclosed dispute between the parties. The settlement agreement achieves AHIP's objectives of financial relief and a specific end date for the management of AHIP's portfolio by Aimbridge.

[Travis Beatty, CFO at American Hotel Income Properties REIT]

Under the settlement agreement, AHIP made a one-time payment of $2.3 million to the master hotel manager to settle a current liability of $6.2 million in respect of currently deferred termination fees. Back to our Q1 results. On a same-store basis in the first quarter of 2026, revenue was $36.2 million, up 2.2% compared to the prior year.

[Travis Beatty, CFO at American Hotel Income Properties REIT]

Normalized diluted Funds From Operations, or FFO, was negative $0.03 for the quarter compared to normalized diluted FFO of negative $0.02 for the same period last year. At March 31, 2026, AHIP had an unrestricted cash balance of $15.5 million compared to $36.4 million at December 31, 2025. The decrease in cash during the quarter was primarily due to the redemption of $25 million of the $50 million outstanding Series C shares.

[Travis Beatty, CFO at American Hotel Income Properties REIT]

At March 31, 2026, AHIP held a restricted cash balance of $22.9 million and had an additional $13.1 million available under the portfolio loan for capital improvements related to properties secured by the loan. Debt to gross book value was 50.1% at March 31, 2026, an increase of 140 basis points compared to December 31, 2025.

[Travis Beatty, CFO at American Hotel Income Properties REIT]

Debt to EBITDA at March 31, 2026, was 10.4x, an increase of 1.0x compared to December 31, 2025. The change in debt to gross book value and debt to EBITDA ratios was driven by a reduction in unrestricted cash balances from the Series C redemption of $25 million and use of net proceeds from completed dispositions to reduce outstanding debt. I'll now turn the call back to John for some closing remarks.

[John O'Neill, CEO at American Hotel Income Properties REIT]

Thank you, Travis. That concludes our prepared remarks. Thank you again, everyone, for joining us on our call today. I look forward to speaking with you in August to report our second quarter 2026 results. Thank you.

[Operator]

Thank you for participating in the conference. This does conclude the program. You may now disconnect.

Participants

Executives

• Bruce Pittet, COO
• John O'Neill, CEO
• Travis Beatty, CFO