American Hotel Income Properties REIT LP scores two-year railway lodging contract
American Hotel Income Properties REIT LP 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 I
American Hotel Income Properties REIT LP 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.”