Acrophyte Hospitality Trust’s H2 DPS falls 46.7% to US$0.01026

ACROPHYTE Hospitality Trust’s distribution per stapled security (DPS) for the half year ended December 2024 was down 55.9 per cent at US$0.00848, from US$0.01929 in H2 FY2023.

The distribution will be paid out on Mar 28, after the record date on Mar 7, reported the stapled group’s managers on Thursday (Feb 27).

Its H2 revenue declined 5.2 per cent year on year to US$84.9 million from US$89.5 million in the year-ago period. 

Meanwhile, its net property income (NPI) dropped 9.2 per cent to US$23.3 million from US$25.7 million previously. 

The top-line decline came on the back of a reduction in portfolio size due to the disposal of hotels and asset enhancement initiative projects in 2024, which resulted in a lower number of rooms available for sale, the manager said. 

Lee Jin Yong, CEO of the manager, said: “Our FY2024 operational performance was impacted by the sale of three hotels and asset enhancement initiatives (AEIs) at six of our higher performing hotels.”

He added: “We remain committed to strengthening our portfolio by divesting underperforming and non-core assets and re-deploying capital to higher-yielding core assets to build resilience.”

With the sales of Hyatt Place Pittsburgh Airport in March, Hyatt House Plymouth Meeting in July and Hyatt House Shelton in October, the trust’s portfolio size contracted 8.3 per cent in 2024. This brought the number of hotels in its portfolio down to 33 from 36, as well as reduced its total number of rooms from 4,700 to 4,315 over the year.

AEIs conducted at six of the trust’s higher performing hotels, which interrupted their operations and brought the number of rooms available for sale in its portfolio down by 4.9 per cent, were also responsible for the top-line decline.

Hyatt Place Mystic, Hyatt Place Rancho Cordova and Hyatt Place Omaha completed AEIs in H1 while Hyatt Place Secaucus, Hyatt Place Lakeland Center and Hyatt Place Tampa Busch Gardens finished theirs in H2.

Acrophyte Hospitality Trust was previously known as ARA US Hospitality Trust.

The trust’s distributable income was down 55.9 per cent at US$4.9 million from US$11.2 million in H2 FY2023. Prior to retention, the income available for distribution would have been US$5.9 million.

For FY2024, its DPS was down at US$0.01595 from US$0.0343 in FY2023. Revenue fell 3.8 per cent on the year to US$168.8 million from US$175.5 million, and NPI fell 7 per cent to US$44.3 million from US$47.7 million. 

Full-year distributable income retreated to US$9.3 million, down 53.4 per cent from US$19.8 million for FY2023, due to higher finance costs from inflationary pressures. Income available for distribution prior to retention was US$10.3 million.

Net asset value per stapled security as at end-2024 fell marginally to US$0.73 from US$0.74 as at end-2023. 

Excluding the three hotels that were sold, the value of its portfolio – comprising 33 hotels – inched up 2.2 per cent to US$728 million by end-2024, compared to US$712.3 million a year prior.

For FY2024, portfolio occupancy had dropped to 68.7 per cent from 69.3 per cent, net gearing fell to 39.1 per cent from 40 per cent, while aggregate leverage ratio rose slightly to 41.6 per cent from 41.5 per cent.

Weighted average debt maturity as at Dec 31, 2024, stood at 1.5 years as compared to 2.5 years as at Dec 31, 2023.

US hospitality outlook

Travel activity in 2025 should be sustained by favourable economic conditions of low unemployment, robust consumer spending and strong business investments, the trust’s management said.

However, the Trump administration’s policy changes could pose risks to inbound travel, it cautioned. 

Data from the US Travel Association forecasts an upswing in inbound international visits by 8.8 per cent in 2025 and 8.9 per cent in 2026 on the back of major upcoming sports and entertainment events, the management noted. 

Lee said: “While the US lodging industry is projected to experience modest growth in 2025, business travel, especially meetings and group events, is poised to be a bright spot.”

Stapled securities of Acrophyte Hospitality Trust ended Thursday 2.3 per cent or US$0.005 higher at US$0.225.