VANCOUVER, June 16, 2015 /CNW/ - American Hotel Income Properties REIT LP ("AHIP") (TSX: HOT.UN; OTCQX: AHOTF) announced today that it has executed with one of its national railway customers a new two year railway lodging contract for 50 rooms per night at its Holiday Inn Oklahoma City Airport hotel.
AHIP acquired the 147-room Holiday Inn Oklahoma City Airport hotel in November 2014. This new railway contract will commence in July 2015 and will secure 34% of the hotel's total available rooms. AHIP expects this agreement to be immediately accretive to adjusted funds from operations ("AFFO") per unit and should increase hotel occupancy by approximately 24%. It is also expected to benefit the adjacent Staybridge Suites Oklahoma City Airport hotel, also owned by AHIP, with any overflow guests.
Rob O'Neill, AHIP's Chief Executive Officer, commented, "I am delighted to announce the first instance of AHIP's railway lodging business providing guaranteed occupancy to one of our branded hotels." Mr. O'Neill continued, "Securing a multiyear railway contract is one of several rail initiatives we are actively pursuing to address our rail customers' increasing demand for rail employee accommodations in select locations. The minimum-occupancy guarantees in the new contract are expected to decrease the seasonality of revenues and improve the predictability of cash flows at our Holiday Inn Oklahoma City Airport hotel. In addition, the rail guests will generate incidental revenues through the utilization of food and beverage outlets within the hotel. AHIP intends to continue to look for opportunities to implement rail contracts across its branded hotel portfolio to augment existing occupancy."
Certain statements contained in this news release may constitute forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "plan", "expect", "may", "will", "intend", "should", and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Forward-looking statements in this news release include, without limitation, references to future railway agreements with branded hotels as well as impacts on expected occupancy levels, accretion to AFFO per unit, seasonality of revenues, expected cash flows and incidental revenues.
Forward-looking information is based on a number of key expectations and assumptions made by AHIP, including, without limitation: a reasonably stable North American economy and stock market; the continued strength of the U.S. lodging industry; and the addition of rail rooms in the future. Although the forward-looking information contained in this news release is based on what AHIP's management believes to be reasonable assumptions, AHIP cannot assure investors that actual results will be consistent with such information.
Forward-looking information reflects current expectations of AHIP's management regarding future events and operating performance as of the date of this news release. Such information involves significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, without limitation, those factors that can be found under "Risk Factors" in AHIP's Annual Information Form dated March 27, 2015 and under "Risks and Uncertainties" in AHIP's Management's Discussion and Analysis dated May 13, 2015, both of which are available on SEDAR at www.sedar.com.
The forward-looking statements contained herein represent AHIP's expectations as of the date of this news release, and are subject to change after this date. AHIP assumes no obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law.
ABOUT AMERICAN HOTEL INCOME PROPERTIES REIT LP
AHIP is a limited partnership formed under the Limited Partnerships Act (Ontario) to invest in hotel real estate properties located substantially in the United States and is engaged primarily in the railroad employee accommodation, transportation-oriented, and select-service lodging sectors. AHIP's properties are mostly located in secondary and tertiary markets in the United States in close proximity to railroads, airports, highway interchanges, and other demand generators. AHIP owns hotels serving the U.S. rail industry pursuant to long-term railway contracts and hotels affiliated with leading national and international hotel brands. AHIP's long-term objectives are to: (i) generate stable and growing cash distributions from hotel properties substantially in the U.S.; (ii) enhance the value of its assets and maximize the long-term value of the hotel properties through active management; and (iii) expand its asset base and increase its AFFO per unit through an accretive acquisition program, participation in strategic development opportunities and improvements to its properties through targeted value-added capital expenditure programs.
THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR THE ACCURACY OF THIS NEWS RELEASE.
SOURCE American Hotel Income Properties REIT LP
For further information: please contact: Andrew Greig, Investor Relations, American Hotel Income Properties REIT LP, Suite 1660 - 401 West Georgia Street, Vancouver, B.C. V6B 5A1, Phone: 604-630-3134, Email: [email protected]