Acrophyte Hospitality Trust Q3 2025 Operational and Financial Update

Key Points and Investor Highlights

• Portfolio Realignment and Revenue Decline:
  Acrophyte Hospitality Trust (“ACRO-HT”) reported a 6.3% year-on-year decline in gross revenue for the first nine months of 2025, driven primarily by the disposal of two hotels and temporary revenue reductions from renovations at two high-performing properties. The portfolio now comprises 32 hotels, down from 34 a year earlier, with total room count falling 5.7% to 4,188.
• Operating Income and Margin Pressure:
  Net Property Income (“NPI”) experienced a sharper decline of 13.9%, coming in at US\$29.1 million versus US\$33.8 million in the prior year. Gross Operating Profit (“GOP”) fell 9.6% to US\$41.9 million. Both NPI and GOP margins contracted, reflecting increased operating expenses—particularly labor and insurance costs—which are key points of concern for ongoing profitability.
• Same-Store Performance:
  On a same-store basis (excluding divestitures and renovations), gross revenue slipped by a marginal 1.2%, but NPI dropped 10.6%. This signals that cost pressures are impacting even the underlying portfolio, not just those assets affected by strategic changes.
• Macroeconomic Context:
  The US economic backdrop remained moderately positive, with GDP growth forecasted at 2.3% annualized and CPI inflation at 3.0% for the year ending September 2025. However, the labor market is cooling (unemployment at 4.3%), prompting the Federal Reserve to reduce rates by 25 basis points in September and October. Corporate travel and midweek demand have weakened, impacting pricing power and Average Daily Rate (“ADR”) across the hospitality sector.
• Active Portfolio Management and Capital Allocation:
  The sale of Hyatt Place Detroit Auburn Hills for US\$6.65 million was completed in September 2025. Proceeds are earmarked for further renovations, working capital, or debt repayment, underscoring a disciplined approach to capital management. As of end-September, ACRO-HT had US\$32.5 million in cash and cash equivalents, which includes reserves for upcoming capital expenditures.
• Management Outlook and Strategy:
  CEO Lee Jin Yong emphasized continued focus on operational efficiency, portfolio optimization, and financial flexibility. Management remains alert to evolving market conditions, with an active asset management approach that has helped the portfolio outperform its competitive set despite industry headwinds.
• Important Shareholder Considerations:
  – The reduction in portfolio size and available rooms is likely to impact near-term revenue and earnings, which could be price sensitive.
  – Increased operating costs (labor and insurance) are compressing margins and may affect future distributions.
  – Proceeds from asset sales are being reinvested or used for debt management, which could influence future growth prospects and balance sheet strength.
  – The overall hospitality sector remains under pressure from macroeconomic uncertainty, subdued business travel, and slower international travel, which could affect ACRO-HT’s future performance.
  – The announcement contains forward-looking statements and risk factors; investors should exercise caution regarding future projections.

About Acrophyte Hospitality Trust

ACRO-HT is a Singapore Exchange-listed stapled group investing in income-producing hospitality assets across the United States. As of this report, the portfolio comprises 32 select-service hotels with 4,188 rooms across 17 states. The Trust is managed by wholly owned subsidiaries of Acrophyte Asset Management Pte Ltd, part of the Tang Organization—a diversified multinational conglomerate with expertise in real estate, construction, hospitality, and education.

Potential Share Price Movers

• Portfolio downsizing and renovations may cause near-term earnings volatility.
• Rising operating expenses are pressuring profit margins, a negative signal for potential distributions.
• Active capital management and asset sales enhance flexibility but may limit growth if not offset by effective reinvestment.
• Macroeconomic and sector headwinds could persist, affecting occupancy, ADR, and overall profitability.

Contact Information

For further enquiries, investors may contact the Investor Relations team at [email protected].

Disclaimer

This article is provided for informational purposes only and does not constitute investment advice or an offer to buy or sell securities. The value of stapled securities in Acrophyte Hospitality Trust may fluctuate, and past performance is not indicative of future results. Investors should be aware of the risks associated with investments in hospitality real estate and are advised to consult their professional advisors before making any investment decisions. The information herein is based on publicly disclosed data and forward-looking statements which are subject to risks, uncertainties, and assumptions. Actual outcomes may differ materially from those expressed or implied.

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