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AMERICAN HOTEL (TSE:HOT.UN)
TSX:HOT.UN
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AMERICAN HOTEL
(TSX:HOT.UN)
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Select Model
Rating:49Neutral
Price Target:
C$0.51
▲(7.87% Upside)
The score is held down primarily by weak financial performance (declining revenue, sizable losses, high leverage, and negative operating/free cash flow). Technicals are a partial offset with a strong uptrend, but overbought readings raise near-term risk. Valuation remains unattractive due to negative earnings and no dividend yield support provided.
Positive Factors
Strategic Partnerships
Partnerships with well-known hotel brands enhance brand recognition and operational expertise, potentially driving long-term guest loyalty and revenue.
Dual Revenue Model
The dual revenue model provides diversified income streams, reducing reliance on any single source and potentially stabilizing revenue over time.
Property Management Efficiency
Effective management practices can enhance property performance, leading to higher occupancy rates and profitability, supporting long-term business sustainability.
Negative Factors
High Leverage
High leverage increases financial risk and limits flexibility, potentially impacting the company's ability to invest in growth and weather economic downturns.
Declining Revenue
A declining revenue trend suggests challenges in maintaining market share and demand, which could hinder long-term growth and profitability.
Negative Cash Flow
Negative cash flow indicates liquidity issues, limiting the company's ability to fund operations and invest in future growth, posing a risk to financial stability.
AMERICAN HOTEL (HOT.UN) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$33.83M
Dividend YieldN/A
Average Volume (3M)65.06K
Price to Earnings (P/E)―
Beta (1Y)1.29
Revenue Growth-24.95%
EPS Growth-1.42%
CountryCA
Employees11
SectorReal Estate
Sector Strength53
IndustryREIT - Hotel & Motel
Share Statistics
EPS (TTM)-0.43
Shares Outstanding71,972,660
10 Day Avg. Volume85,568
30 Day Avg. Volume65,056
Financial Highlights & Ratios
PEG Ratio0.02
Price to Book (P/B)0.28
Price to Sales (P/S)0.15
P/FCF Ratio61.42
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$0.35Price Target Upside-24.63% Downside
Rating ConsensusHold
Number of Analyst Covering1
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
AMERICAN HOTEL Business Overview & Revenue Model
Company DescriptionAmerican Hotel Income Properties REIT LP (TSX: HOT.UN, TSX: HOT.U, TSX: HOT.DB.U), or AHIP, is a limited partnership formed to invest in hotel real estate properties across the United States. AHIP's 78 premium branded, select-service hotels are located in secondary metropolitan markets that benefit from diverse and stable demand. AHIP hotels operate under brands affiliated with Marriott, Hilton, IHG and Choice Hotels through license agreements. The Company's long-term objectives are to build on its proven track record of successful investment, deliver monthly U.S. dollar denominated distributions to unitholders, and generate value through the continued growth of its diversified hotel portfolio.
How the Company Makes MoneyAMERICAN HOTEL generates revenue primarily through the ownership and leasing of hotel properties, earning income from room rentals and ancillary services such as food and beverage sales, event hosting, and other amenities. The company benefits from a dual revenue model: direct income from its owned and leased assets and management fees from properties it oversees on behalf of third-party owners. Key revenue streams include daily room rates, occupancy rates, and seasonal demand fluctuations. Strategic partnerships with established hotel brands help attract a steady flow of guests, while efficient property management practices contribute to maximizing profitability. Additionally, the company may engage in renovations and value-add projects to enhance property appeal and drive higher occupancy and rate growth, further contributing to its earnings.
AMERICAN HOTEL Earnings Call Summary
Earnings Call Date:Aug 07, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Mar 11, 2026
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture. On the positive side, AHIP achieved record average daily rates and successfully managed debt through strategic asset dispositions. However, there were notable declines in same-store revenue, RevPAR, and NOI margins, coupled with decreased demand in government and group segments.Q2-2025 Updates
Positive Updates
Record Average Daily Rate and RevPAR
AHIP achieved all-time highs in average daily rate and RevPAR. The RevPAR index increased by 70 basis points to almost 115% during the quarter, highlighting the success of strategic asset dispositions.
Successful Asset Dispositions and Debt Management
AHIP sold 16 hotel properties in 2024 for $165.2 million and completed the disposition of 11 hotel properties in the first half of 2025 for $73.5 million. These sales improved portfolio asset quality and reduced leverage. AHIP has no secured debt maturing until late 2026.
Improvement in Extended Stay Segment
The Extended Stay segment was the strongest performing vertical, with a RevPAR increase of 1% over Q2 2024, finishing at $115.
Stabilized Labor Costs
Reliance on third-party labor has declined by 75% since the end of 2023, helping stabilize rooms department costs and improving housekeeping efficiency.
Negative Updates
Decline in Same-Store Revenue and RevPAR
Total revenue decreased by 1.7% and RevPAR finished at $108, a 2.3% decrease compared to Q2 2024, driven by contractions in the government and group segments.
Decreased NOI Margin
NOI margin decreased by 157 basis points to 33.8% for the quarter compared to the same period in 2024, due to inconsistent asset-level performance and elevated undistributed expenses.
Reduced Government and Group Demand
Government revenue dropped to about 90% of Q2 2024 levels, and group travel revenue dropped to 83% of Q2 2024 across the portfolio.
Lower Average Daily Rate
Average daily rate finished at $142 for the quarter, which was 1.5% below Q2 2024 levels.
Decline in Normalized Diluted FFO
Normalized diluted FFO was $0.06 per unit compared to $0.10 per unit in Q2 2024.
Company Guidance
During the second quarter of 2025, American Hotel Income Properties REIT LP (AHIP) achieved record highs in average daily rate and RevPAR, with a RevPAR index increase of 70 basis points to nearly 115%. Despite these achievements, same-store total revenue for AHIP's 38 hotels decreased by 1.7%, and RevPAR fell by 2.3% to $108 compared to Q2 2024. The decline was attributed to reduced demand from government and group segments and challenging comparisons to exceptional demand in the previous year. The NOI margin decreased by 157 basis points to 33.8%. To strengthen its financial position, AHIP sold 16 hotel properties in 2024 for $165.2 million and 11 properties in the first half of 2025 for $73.5 million, with eight sales in Q2 at a 6.9% cap rate. As of mid-2025, AHIP has no secured debt maturing until late 2026, and further dispositions are planned. The company has purchased nearly 2 million units under a normal course issuer bid, reflecting its view that units are trading below asset value.AMERICAN HOTEL Financial Statement Overview
Summary
Weak fundamentals: revenue is declining (-8.38% TTM) with persistent losses (net margin -31.01%) and negative EBIT margin. Leverage is high (debt-to-equity 3.69) with negative ROE, and liquidity is pressured by negative operating and free cash flow despite some FCF improvement.Income Statement
The income statement shows a declining revenue trend with a negative revenue growth rate of -8.38% in the TTM. The company has consistently reported negative net income, leading to a negative net profit margin of -31.01% in the TTM. Gross profit margin remains relatively stable but low at 28.47%. The EBIT margin is negative, indicating operational challenges. Overall, the income statement reflects financial struggles with declining revenues and profitability issues.45
Neutral
Balance Sheet
The balance sheet reveals a high debt-to-equity ratio of 3.69 in the TTM, indicating significant leverage. The return on equity is negative, reflecting ongoing losses and poor returns for shareholders. The equity ratio is low, suggesting a heavy reliance on debt financing. While the company maintains a substantial asset base, the high leverage poses financial risks.50
Neutral
Cash Flow
Cash flow analysis shows a negative operating cash flow in the TTM, with a low operating cash flow to net income ratio of 0.09. Free cash flow is also negative, though it has improved by 63.85% compared to the previous period. The free cash flow to net income ratio is negative, indicating cash flow challenges. Overall, the cash flow statement highlights liquidity issues and insufficient cash generation.40
Negative
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 198.39M | 256.88M | 280.52M | 281.37M | 241.31M | 174.85M |
| Gross Profit | 55.06M | 73.42M | 83.37M | 40.33M | 45.83M | 3.33M |
| EBITDA | -23.82M | 32.48M | -7.13M | 37.12M | 81.91M | 8.07M |
| Net Income | -93.25M | -46.98M | -81.49M | -39.64M | -15.61M | -66.43M |
Balance Sheet | ||||||
| Total Assets | 537.05M | 685.11M | 954.89M | 1.05B | 1.15B | 1.19B |
| Cash, Cash Equivalents and Short-Term Investments | 25.61M | 27.84M | 17.80M | 12.95M | 14.70M | 20.15M |
| Total Debt | 369.93M | 431.63M | 645.66M | 688.44M | 738.85M | 782.31M |
| Total Liabilities | 415.20M | 501.09M | 721.94M | 730.69M | 775.89M | 852.19M |
| Stockholders Equity | 78.29M | 138.92M | 189.38M | 278.54M | 331.03M | 341.71M |
Cash Flow | ||||||
| Free Cash Flow | -4.10M | 631.00K | 5.56M | 16.66M | 11.74M | -5.39M |
| Operating Cash Flow | -3.12M | 10.70M | 29.70M | 44.91M | 17.95M | 3.55M |
| Investing Cash Flow | 180.31M | 155.19M | 2.69M | 15.30M | -18.63M | -1.96M |
| Financing Cash Flow | -177.40M | -155.85M | -28.63M | -61.96M | -4.34M | 932.00K |
AMERICAN HOTEL Technical Analysis
Neutral
0.47
Price Trends
0.41
Positive
0.39
Positive
0.43
Positive
Market Momentum
0.01
Positive
51.25
Neutral
48.72
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:HOT.UN, the sentiment is Neutral. The current price of 0.47 is below the 20-day moving average (MA) of 0.49, above the 50-day MA of 0.41, and above the 200-day MA of 0.43, indicating a neutral trend. The MACD of 0.01 indicates Positive momentum. The RSI at 51.25 is Neutral, neither overbought nor oversold. The STOCH value of 48.72 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:HOT.UN.
AMERICAN HOTEL Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | C$2.13B | 3.93 | 18.10% | 4.42% | 6.19% | 79.98% | |
70 Outperform | C$638.15M | 8.53 | 7.26% | 3.87% | -1.21% | ― | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
65 Neutral | C$6.46B | 213.97 | 1.99% | 3.00% | 28.05% | 662.10% | |
63 Neutral | C$856.02M | -10.04 | -4.93% | 7.28% | -20.06% | 19.27% | |
54 Neutral | C$5.99B | 99.33 | 0.65% | 4.20% | -6.51% | -81.28% | |
49 Neutral | C$33.83M | -0.28 | ― | ― | -24.95% | -1.42% |
* Real Estate Sector Average
TSE:HOT.UN
AMERICAN HOTEL
0.47
-0.26
-35.62%
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.